ACCTG 101 Lecture Notes - Lecture 9: Child Custody
Document Summary
Monitoring of compliance with procedures: segregation of duties. Responsibility for related activities assigned to different people. Purchasing ordering and receiving goods, paying invoices. Selling making the sale, shipping goods, billing for goods, receipt of payment. Separation of responsibility for recording and physical custody of the asset: documentation procedures. All documents generated by the business to be pre-numbered. Provides a audit trail for checking of transactions: physical, mechanical and electronic controls. Use of safes and safety deposit boxes. Reporting of discrepancies and exceptions to management for action: other controls. Cash is the most desirable asset because it is readily convertible into any other asset. Cash consists of anything the bank will accept as a deposit: Internal control over cash receipts: establishment of responsibility. Only designated personnel authorised to handle cash receipts: segregation of duties. Different individuals receive cash, record cash receipts and hold the cash: documentation procedures. Use remittance advice, register taps and deposit slips: physical, mechanical and electronic controls.