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Cash Receipts System Analysis

The document summarizes internal control strengths and weaknesses for the cash receipts system of Apple Blossom Cologne Company. For strengths, it lists 7 controls including segregation of duties for mail receipt listing and reconciliation, intact deposits, and separate personnel for deposits and bank reconciliations. For weaknesses, it identifies potential errors from duplicate deposit tickets and separate cashier and accounts receivable duties, as well as compensating substantive procedures like recalculation and vouching.

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Melia Idfriani
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30 views2 pages

Cash Receipts System Analysis

The document summarizes internal control strengths and weaknesses for the cash receipts system of Apple Blossom Cologne Company. For strengths, it lists 7 controls including segregation of duties for mail receipt listing and reconciliation, intact deposits, and separate personnel for deposits and bank reconciliations. For weaknesses, it identifies potential errors from duplicate deposit tickets and separate cashier and accounts receivable duties, as well as compensating substantive procedures like recalculation and vouching.

Uploaded by

Melia Idfriani
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

ASSIGNMENT 3

PART A
2.
a.
Apple Blossom Cologne Company
Cash Receipts System
Internal Control Strength

No. Strength Possible Test of Control

Segregation of duties

1. The mail receipts listed by a person - Observations


who has no other cash or account
receivables responsibilities.
2. The list of mail receipts - Observations
independently reconciled to the - Inquiry
accounting records by a person
who does not have access to cash
receipts.
Access to assets

3. All receipts deposited intact. - Vouching

4. Bank deposits made by a person - Observations


who does not prepare the deposit. - Inquiry

Input Control

5. All mail receipts recorded for - Observations


control purposes.
6. The person who opens the mail - Observations
record the receipts immediately.
Process Control

7. Cash balance reconciled. - Observations


b.

Apple Blossom Cologne Company


Cash Receipts System
Internal Control Weakness

No. Weakness Potential Error Compensating Substantive


Procedure

Pemisahan Fungsi

1. A duplicate deposit - The amount of - Recalculation


ticket received by cash receipts may - Tracing
someone who does not have been - Inquiry
prepare or make the incorrectly
deposit. recorded
- Cash receipts may
have been
deposited in the
bank but not
recorded in the
cash receipts
journal
Access to Assets

2. The duties of the - Transfer of cash - Vouching


cashier separate from among bank - Recalculation
those of the accounts accounts may have
receivable clerk. been recorded
incorrectly

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