Question

1. Cash is the asset most susceptible to improper diversion and use. Have you ever found yourself, either as a customer or as an employee, in a position to misappropriate cash? If so, describe the internal control weakness that created the situation. What control(s) would have addressed the problem?

2. Organizations have long used cameras to monitor employees' activities. Now, computer software can monitor employees’ use of their computer (for example, tracking what websites they visit), often without the employees’ knowledge. In your opinion, is such monitoring an appropriate component of internal control?

Answer 1

Answer1.

I am working in a telecom company. There are on cash counter cash collected during whole day and deposited on next day. On weekend collected cash deposited, on Monday. So cashier use this cash to one to three days and cashier misuse for misappropriate cash.

The weakness of internal control is that there is only one person having control over cash, other person not directly or indirectly control cash collection of organization.

We should follow following internal control to avoid misappropriation of cash:-

1. Only designated employee should authorize to handle cash.

2. Management should organize surprise audit of cash on hand.

3. There should to limited access of cash is limited.

Answer 2. Yes, this is an appropriate part of internal control. Normally we install survival camera on work palace to watch and control employees and customer activities. This is a part of internal control. On same basis an organization can install computer software on his all business computer to watch and control his employee’s access of websites during working hours. Due to this type of internal control we can check that whether employees access only business related websites and application during the working hour. They are not misuse & waste his commuter system and working time.