Question

Possible misstatements that may occur during the cash receipts process result from cash receipts being received, but not recorded (which could facilitate embezzlement). A control technique that is used to mitigate the risk of such misstatements is to segregate the duties of the accounts receivable department, general ledger accounting records, and cash receipts. The employee who completed each duty is required to sign his/her initials, and evidence of this has been provided for you in the Accounts_Receivable file. In each transaction, proper segregation of duties is accomplished when no two duties have been completed by the same person. Use IDEA and the information from Roger Company Accounts_Receivable file to determine in which transactions segregation of duties was not properly implemented.

Answer 1

There should be strong internal controls implemented and segregation of duties in the finance department.

Step-by-step explanation:

There is lack of internal controls present in the company which may lead to fraud or errors. The employees assigned to record the transaction are not recording all the cash receipts and are missing some of the cash receipts which can cause errors during reconciliation. The sub divisions of finance department must be segregated and there should be a supervisor who should be responsible to review all the work done by these departments.