Question

please do in handwritten form.

Q1-
A company wants to implement good internal control. What are the policies and procedures you can suggest to minimize human frauds and errors?
Q2-
Assume that you have a company. And the management team estimates that 3% of sales will be uncollectible.
Give any amount of sales and prepare the journal entry using the percent of sales method.

Answer 1

Answer:

Internal controls- These are the set of rules, policies and procedures implemented by company to make sure the safety and security of financial information and assets and preventing the same from fraudulent practices.Internal control system improves operational efficiency, accuracy and reliability.

How to implement a good internal control to prevent from human fraud and errors-

These are the following points to be taken care for implementing a sound internal control so that fraud and error can be as minimized as possible:

• Company should develop policies and procedures in writing so as to have the proof.
• Company should reconcile itsaccounts regularly.
• Keeping the supporting documents and vouchers for cross checking the transactions.
• Timely training and developmentto staff.
• Maintain an adequate and efficient accounting information system.
• Password protected systems and folders.
• Access of only a few people to treasury and other important departments.
• Timely internal audit should be done to check the financial statements.