question 3 Internal Control Activities an atmosphere of ethi

question #3 Internal Control Activities

an atmosphere of ethical Beladn organization 2. A company discovers the need to increase mea- sures taken to mitigate the risk of employee theft. Required Which element of internal control does each of the above scenarios best relate? 3. Internal Control Activities LOi, 2 Douglas Company has the following internal control procedures 1. A pre-numbered shipping document is used for each shipment to customers. 2. The employee who writes checks cannot make entries in the general ledger. 3. An internal auditor reconciles the bank state- ment each month. 4. The company stores inventory in a room that is monitored by cameras. 5. The manager is required to authorize purchases before they are made by employees. Required For each item, identify the internal control principle that is being followed. t be relevant to a t as $540, but it 150

Solution

Internal control principles that are being followed by Douglas Company are ::

1. Documentation procedures

2. Segregation of duties

3. Independent internal verification

4. Physical controls

5. Establishment of responsibility