In: Accounting
Apple Case- Segregation of Duties-Chapter 5 Extra Credit
Apple sells all products on 30 day trade credit. Ernst & Young CPAs is performing an audit of Apple and is becoming familiar with the department documents of the beverage wholesaler. Ernst & Young CPAs is hoping that they can reduce control risk to a minimum level but only if control activities are found which include segregation of duties and safeguarding of assets. For each numbered item choose which department within the organization is likely to perform each task for proper internal control. Choose only 1 department. If the department is not listed, choose “None Of The Above”.
List 1
Billing-Revenue Cycle
Sale-Revenue Cycle
Credit-Revenue Cycle
Shipping-Revenue Cycle
Receiving-Expenditures Cycle-unless Returns
Warehouse-Expenditues and Revenue Cycles
Vouchers Payable-Expenditures Cycle
Accounts Receivable-Revenue Cycle
Cash Disbursements-Expenditures Cycle
Human Resources
Payroll
None Of The Above
In the revenue cycle, the department that should not be allowed to authorize a bad debt written off once permission is granted. ACCOUNTS RECEIVABLE- REVENUE CYCLE department.
In the payroll cycle the department that maintains hiring date, department, salary and position. PAYROLL department.
In the revenue cycle, the department that should approve the sales order before the goods are shipped to the customer. SHIPPING-REVENUE CYCLE department.
In the expenditure cycle, the department that should approve the voucher and record payment to the vendor after the payment is made but should not be allowed to mail the check. NON OF THE ABOVE .
In the revenue cycle, the department that should prepare the sales invoice is the BILLING-REVENUE CYCLE department.
In the expenditure cycle , the department that should receive a blind copy of the purchase order and prepare a document indicating what goods arrived from the vendor NON OF THE ABOVE department.
In the payroll cycle, the department that should handout payroll checks to employees that do not receive direct deposit. PAYROLL department.
In the revenue cycle, the department that should only be allowed to move goods within the company and not send goods outside to the customer. WAREHOUSE-EXPENDITURE AND REVENUE CYCLE department.
In the expenditure cycle, the department that should match up the purchase order and receiving report. RECEIVING-EXPENDITURE CYCLE department.