Establishment of responsibility Essay

While at the takeer, the customer shadower see other employees fashioning the pizzas and the orotund ovens in which the pizzas atomic number 18 baked Instructions Identify the six principles of internal get a line and give an causa of each principle that you might observe when picking up your pizza. Note It whitethorn not be possible to observe all the principles. ) 1st Principle Establishment of responsibility * Only cardinal psyche is responsible for a given task. * For example, the destroy that exchanges the pizza for immediate payment would be the principle of establishment of responsibility. second Principle Segregation of duties.Ac seeming employees balances books * Another personnel has custody of property on hand (making doctors) * In this principle- segregation of duties one stinkernot observe this principle in this scenario. th Principle Documentation procedures * Pre-number documents or invoices * For example, the cashier has pre-number receipts for each o rder that is picked up by the customer. At the end of the clerks swap these invoices are forwarded to ac seeancy to timely record each transaction. 5th Principle Physical mechanical and electronic controls * Consist of having safes, deposit boxes, and time clocks for time worked. * The clerk has a cashier that controls and safeguards the assets to enhance the verity and reliability of the accounting records. th Principle Independent internal verification * Employees review, compare, and reconcile data that was on the watch by them.Three measure are recommended * An example cannot be provided for this principle because a customer cannot commit if * 1st Org. should verify records periodically or on a surprise basis. * 2nd A autobus should make the verification of an employee * 3rd Discrepancies and exceptions should be reported to mgt. to make appropriate corrective action. Chapter 7 fuss Set B P7-2BThe get on of trustees of a local perform service is concerned about th e internal accounting controls pertaining to the offering collections made at weekly services. They ask you to serve on a three-person audit squad with the internal auditor of the university and a CPA who has just joined the church. At a meeting of the audit team and the board of trustees you learn the following A) Indicate the weaknesses in internal accounting control in the discussion of collections. There are a few weaknesses in internal control in the handling of collections for the church, such as in that respect is no supervision when the ushers take money.There is a chance that the ushers can take money from the collection plate. In hang onition, the fiscal secretary manages three tasks like bank reconciliation, has control and has custody of the cash, and maintains the church records. Moreover, the financial secretary holds out cash ($150-$200) per week different withhold amounts for cash expenditures. There is not a witness when the run usher or the financial secretar y count the money. Last, tames are made payable to cash (Kimmel, Weygandt & Kieso, 2007).B) List the improvements in internal control procedures that you intent to make at the next meeting of the audit team for scouts How churches handle usher operations varies from flexure to congregation, but a consistent set of controls protects the fiduciary integrity of the church, and creates confidence among bestowers. One problem in the collection process is that only the dubiousness usher counts the collection without any accountability to ensure his count is accurate, or that all of the funds donated are transferred to the safe.This can be resolved by having the other ushers count the donations and sign off on the report, so that more than one set of eyes have corroborate the donations. Additionally, bids will need to take a course familiarizing would-be ushers with standard operating procedures, and reportage standards before being qualified to volunteer for usher position. Thi s will help solidify controls for the ushers. Head Usher While the church may not be currently experiencing anything wrong with the usher selection and volunteer system at the church, some improvements might be considered.The church might consider making the head usher a year-long status, elected by church members to create continuity, but also impose term limits possibly every 3-4 years a head usher must take a sabbatical. Additionally, because the head usher role is so pivotal in the collection process, and it is a place where mistakes or malfeasance can easily take place it would be helpful for the ushers and the financial secretary to be present in the collection counts, the day of, so someone outside the usher department can verify tithe counts.Financial Secretary The most glaring issue, which opens up easy access for, would be embezzlers in the congregations check indemnity. All checks being written to cash basically enables anyone to cash out the check, the church, a rouge employee or volunteer, or otherwise. All checks need to be made out to the church, not to cash. It would be even correct if the church went the route of many churches by allowing donors to have donations processed monthly (or weekly depending on donor preference) through e-commerce, allowing debit or credit payments to be made automatically to the church account.This will add a layer to the recording process, but it also increases security for donors. The financial secretary also involve to stop pulling cash from weekly donations for cash expenditures as cash transactions are harder to path and thus are more easily abused. Instead a petty cash account call for to be started, and cash allocated as requisite based on historical records of cash expenditures. Additionally, a church credit/debit card, or reimbursement policy greatly will diminish the need for high levels of cash in the petty cash account.Finance Committee The first thing the finance committee needfully to do is to follow its own policy, and conduct annual audits. The churchs 501 (C)(3) nonprofit designation demands this. oftentimes the most trusted employees are the ones who are found to have committed improprieties. Regardless of trust, regular audits, and account is essential. The second major priority is for the financial committee to purchase a fidelity insurance policy that will protect the church in the case of financial impropriety or massive imposture on part of those who handle finances.In addition to the need for an overhaul in policy (discussed below), the financial committee needs to inculcate a culture of financial vigilance and rigor to keep the church from even the perception of financial impropriety. C) What church policies should be changed to improve internal control? The church board of trustees is responsible of make sure that the church runs smoothly, from assigning the right ministers to the right ministries and making sure that the tithes and offerings are accounted for after each service.The first and most important thing that the church needs to do is get some fidelity insurance. This type of insurance will protect the church of losses that may core of fraudulent acts by specified individuals. Protecting the church of any dishonest employee or member who may steal money, securities, and other property that once belong to the church. The second thing is to have an audit conducted because there has not been an audit performed in 15 years. Highly recommend using an outside source of playacting the audit, this way every rock and stone will be turn over.The church financial focal point department should be responsible for counting and recordkeeping of the tithes and offering received but in separate procedures, one office for counting the money and the other office for recordkeeping purposes The head usher responsibility should be making sure that the tithes and offering plates are accounted for and immediately delivering the plates (with one member from the board of trustee) to the financial focus office (the financial office manager, and one individual from the board of trustees are the only ones with keys to both offices).The financial management recordkeeping personnel and the financial secretary should first come to an agreement on how much cash is needed for the week expense. Also the two will count the money with the intention to be deposit on with a deposit slip the financial secretary will be responsible of making the deposit and afterward returning the deposit receipt to the recordkeeping office for recording purposes.