Please help me with the following question:
Newell Company has the following internal control procedures over cash disbursements. Identify the internal control principle that is applicable to each procedure.
(a) Company checks are prenumbered.
(b) The bank statement is reconciled monthly by an internal auditor.
(c) Blank checks are stored in a safe in the treasurer's office.
(d) Only the treasurer or assistant treasurer may sign checks.
(e) Check signers are not allowed to record cash disbursement transactions.
Hint: Identify the internal control principles applicable to cash disbursements.
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The six principles of internal control that apply to cash disbursements are as follows:
- Establishment of responsibility - Only designated personnel (treasurer) are authorized to ...
In this solution, we identify the internal control principles that apply to a series of procedures.