Question

Identify the control activity that is applicable to each item in the table shown below:

1		All cash is deposited intact, in the bank account, daily.
2		Blank cheques are stored in a safe in the controller’s office.
3		All cashiers are bonded.
4		All over-the-counter receipts are recorded on cash registers.
5		All payments, except for petty cash transactions, are made by cheque.
6		Cheque signers are not allowed to record cash payment transactions.
7		Company cheques are pre-numbered.
8		Daily cash counts are made by cashier department supervisors.
9		Only cashiers may operate cash registers.
10		Only the controller or assistant controller may sign cheques.
11		The bank statement is reconciled monthly by an internal auditor.
12		The duties of receiving cash, recording cash, and maintaining custody of cash are assigned to different individuals.

Answer 1

Solutions:

1	All cash is deposited intact, in the bank account, daily – Physical Control
2	Blank cheques are stored in a safe in the controller’s office – Physical Control
3	All cashiers are bonded- Human Resource Controls
4	All over-the-counter receipts are recorded on cash registers – Physical Control
5	All payments, except for petty cash transactions, are made by cheque -
6	Cheque signers are not allowed to record cash payment transactions - Segregation of Duties
7	Company cheques are pre-numbered – Documentation Procedures
8	Daily cash counts are made by cashier department supervisors – Independent Internal Verification
9	Only cashiers may operate cash registers.- Establishment of responsibilities
10	Only the controller or assistant controller may sign cheques – Establishment of Responsibilities
11	The bank statement is reconciled monthly by an internal auditor – Independent Interenal Verification
12	The duties of receiving cash, recording cash, and maintaining custody of cash are assigned to different individuals. – Segregation of Duties

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