Question

As a manager you gave the responsibly of billing, cash collection, reconciling the bank statement and keeping the petty cash fund to a long time trusted employee. You just received a notice from the bank that your checking account is overdrawn and you ask this long time employee about the notice. The employee says it must just be a bank error. Find an article in the KU library that discusses a manager's role in internal controls. Do you think you have implemented proper internal controls, why or why not and what if anything would you change?

Answer 1

It is Manager,s is responsibility to ensure that a good business practices are their and followed in all areas in the company, And also to ensure a systems of internal control are in place to prevent and detect fraud risks are identified.

Inorder to produce a reliable financial reporting in compliance with accounting standards and regulations Management should ensure the controls in place are efficient and effective.

Regular review should be undertaken for the system of control to makesure the objective of control is satisfied.

After completion of review management must provide assurances on internal control based Performance and Accountability and this should be report. The report should reflect for any material weakness of Controls identified as well as corrective action taken by management.

Assessing control in place

It is observed that all duty regarding Billing,Cash Collection,reconciliation of bank statement and handle of petty cash fund whole activities are vasted on one trusted long time employee there araises a clear threat of internal control.

Long term Employee knows every things on how the system works in the company and for him it is easy to find loop holes in system as having long standing experience with the company.

Seggregation of Duty The duty such as banking of cash and Reconciliation should be given to different individuals as to identify any missing or error occured and reduce threat of money being stolen.The performance Duties must be diveded to different individual that is seggregation of duty is all about.