Homework SourseChapter 9 Problem P 91 The narrative and systems flowchart f
Chapter 9:
Problem: P 9-1:
The narrative and systems flowchart for the Bridgeport LLC cash
receipts system are included in Exhibit 9.5 and Figure 9.11 (pg. 348),
respectively.
Using Exhibit 9.5 and Figure 9.11, do the following:
a. Prepare a control matrix, including explanations of how each recommended control plan helps to accomplish? Or would accomplish in
the case of missing plans? Each related control goal. Your choice of
recommended control plans should come from Figure 9.4 (pg. 325)/
Exhibit 9.3 (pp. 329? 330) or Figure 9.6 (pg. 334)/Exhibit 9.4 (pg. 338), as appropriate. Be sure to tailor the matrix columns to conform to the
specifics of the Bridgeport system. In doing so, assume the following
two effectiveness goals only:
- Timely deposit of checks?
-Compliance with compensating balance agreements with the
depository bank?
Control Goals of the Bridgeport Cash Receipts Process
Control Goals of the Operations Process
Control Goals of the Information Process
Ensure effectiveness of operations:
Ensure efficient employment of resources (people, computers)
Ensure security of resources (cash, accounts receivable master data)
For the remittance advice inputs (i.e., cash receipts), ensure:
For the accounts receivable master data, ensure:
Recommended control plans
A
B
IV
IC
IA
UC
UA
Present Controls
P-1: Turnaround documents
P-2: Endorse checks immediately
P-3: Preformatted screens
P-4: Compare input data with master data
P-5: Programmed edit checks.
P-6: Procedure for rejected inputs
P-7: Manual agreement of RA batch totals
P-8: Manual agreement of deposit batch totals
Missing Controls
M-1: Document design
M-2: Enter cash receipts in the mailroom (enter data close to original source)
M-3: Computer agreement of batch totals
Possible effectiveness goals include the following:
A – Timely deposit of checks
B – Comply with compensating balance agreements with the depository bank
IV = input validity
IC = input completeness
IA = input accuracy
UC = update completeness
UA = update accuracy
| Control Goals of the Bridgeport Cash Receipts Process | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Control Goals of the Operations Process | Control Goals of the Information Process | ||||||||
| Ensure effectiveness of operations: | Ensure efficient employment of resources (people, computers) | Ensure security of resources (cash, accounts receivable master data) | For the remittance advice inputs (i.e., cash receipts), ensure: | For the accounts receivable master data, ensure: | |||||
| Recommended control plans | A | B | IV | IC | IA | UC | UA | ||
| Present Controls | |||||||||
| P-1: Turnaround documents | |||||||||
| P-2: Endorse checks immediately | |||||||||
| P-3: Preformatted screens | |||||||||
| P-4: Compare input data with master data | |||||||||
| P-5: Programmed edit checks. | |||||||||
| P-6: Procedure for rejected inputs | |||||||||
| P-7: Manual agreement of RA batch totals | |||||||||
| P-8: Manual agreement of deposit batch totals | |||||||||
| Missing Controls | |||||||||
| M-1: Document design | |||||||||
| M-2: Enter cash receipts in the mailroom (enter data close to original source) | |||||||||
| M-3: Computer agreement of batch totals | |||||||||
| Possible effectiveness goals include the following: A – Timely deposit of checks B – Comply with compensating balance agreements with the depository bank | IV = input validity IC = input completeness IA = input accuracy UC = update completeness UA = update accuracy | ||||||||
Solution
Control Goals of the Bridgeport Cash Receipts Process
Control Goals of the Operations Process
Control Goals of the Information Process
Ensure effectiveness of operations:
Ensure efficient employment of resources (people, computers)
Ensure security of resources (cash, accounts receivable master data)
For the remittance advice inputs (i.e., cash receipts), ensure:
For the accounts receivable master data, ensure:
Recommended control plans
A
B
IV
IC
IA
UC
UA
Present Controls
P-1: Turnaround documents
Y
Y
Y
Y
N
Y
Y
Y
Y
P-2: Endorse checks immediately
Y
Y
Y
Y
Y
Y
N
Y
Y
P-3: Preformatted screens
N
Y
Y
Y
N
Y
Y
Y
Y
P-4: Compare input data with master data
Y
N
Y
N
Y
Y
Y
Y
Y
P-5: Programmed edit checks.
Y
Y
Y
Y
Y
Y
Y
Y
Y
P-6: Procedure for rejected inputs
N
Y
Y
N
Y
Y
Y
Y
N
P-7: Manual agreement of RA batch totals
Y
N
Y
N
Y
Y
Y
Y
N
P-8: Manual agreement of deposit batch totals
Y
Y
Y
Y
Y
Y
Y
Y
Y
Missing Controls
N
Y
Y
N
N
Y
N
Y
Y
M-1: Document design
Y
Y
Y
Y
N
Y
N
Y
Y
M-2: Enter cash receipts in the mailroom (enter data close to original source)
Y
Y
Y
N
Y
Y
Y
Y
Y
M-3: Computer agreement of batch totals
Y
Y
Y
Y
Y
Y
Y
Y
Y
Possible effectiveness goals include the following:
A – Timely deposit of checks
B – Comply with compensating balance agreements with the depository bank
IV = input validity
IC = input completeness
IA = input accuracy
UC = update completeness
UA = update accuracy
| Control Goals of the Bridgeport Cash Receipts Process | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Control Goals of the Operations Process | Control Goals of the Information Process | ||||||||
| Ensure effectiveness of operations: | Ensure efficient employment of resources (people, computers) | Ensure security of resources (cash, accounts receivable master data) | For the remittance advice inputs (i.e., cash receipts), ensure: | For the accounts receivable master data, ensure: | |||||
| Recommended control plans | A | B | IV | IC | IA | UC | UA | ||
| Present Controls | |||||||||
| P-1: Turnaround documents | Y | Y | Y | Y | N | Y | Y | Y | Y |
| P-2: Endorse checks immediately | Y | Y | Y | Y | Y | Y | N | Y | Y |
| P-3: Preformatted screens | N | Y | Y | Y | N | Y | Y | Y | Y |
| P-4: Compare input data with master data | Y | N | Y | N | Y | Y | Y | Y | Y |
| P-5: Programmed edit checks. | Y | Y | Y | Y | Y | Y | Y | Y | Y |
| P-6: Procedure for rejected inputs | N | Y | Y | N | Y | Y | Y | Y | N |
| P-7: Manual agreement of RA batch totals | Y | N | Y | N | Y | Y | Y | Y | N |
| P-8: Manual agreement of deposit batch totals | Y | Y | Y | Y | Y | Y | Y | Y | Y |
| Missing Controls | N | Y | Y | N | N | Y | N | Y | Y |
| M-1: Document design | Y | Y | Y | Y | N | Y | N | Y | Y |
| M-2: Enter cash receipts in the mailroom (enter data close to original source) | Y | Y | Y | N | Y | Y | Y | Y | Y |
| M-3: Computer agreement of batch totals | Y | Y | Y | Y | Y | Y | Y | Y | Y |
| Possible effectiveness goals include the following: A – Timely deposit of checks B – Comply with compensating balance agreements with the depository bank | IV = input validity IC = input completeness IA = input accuracy UC = update completeness UA = update accuracy |
