Question

In your store, the amount of petty cash on hand did not correspond to the amount in the petty cash account.

As a manager, you may use internal control knowedge to answer:

1.What errors may occur?

2.How to use a internal control procedure to prevent this problem in the future?

Answer 1

1. The error which might have occurred will be lack of proper implementation of internal control systems such as improper supervision, non recording of petty transactions immediately after they have been met, negligence of employees etc.

2. Some of the following nternal control systems may be implemented in order to prevent these problems in future such as , sudden verification or surprise verification of petty cash accounts with proper evidences for proof, timely accounting for each and every transaction occurring, rotation of the persons handling perry cash and accounts on a frequent and mandatory basis in a jumbling manner which helps to bring a huge change which will bring down such improper handling issues to a large scale, proper and timely usage of technology by installing CC cameras which will help to monitor each and every activity that takes place and also by doing so even the staff will become conscious and will not resort or indulge in such activities in future situations.