Establishment of responsibility Essay

While at the counter, the customer can see other employees making the pizzas and the large ovens in which the pizzas are baked Instructions Identify the six rules of congenital lead and pay an example of severally principle that you magnate observe when picking up your pizza. Note It whitethorn not be possible to observe al unity the principles. ) 1st Principle Establishment of responsibility * Only one individual is trusty for a given task. * For example, the cashier that exchanges the pizza for cash would be the principle of establishment of responsibility. 2nd Principle Segregation of duties.Ac counting employees balances books * another(prenominal) personnel has custody of cash on hand (making deposits) * In this principle- separationism of duties one cannot observe this principle in this scenario. th Principle reinforcement procedures * Pre-number documents or invoices * For example, the cashier has pre-number receipts for each order that is picked up by the cust omer. At the end of the salesclerks shift these invoices are forwarded to story to timely record each transaction. 5th Principle Physical mechanic and electronic controls * Consist of having safes, deposit boxes, and time clocks for time worked. * The clerk has a cashier that controls and safeguards the assets to enhance the accuracy and reliability of the accounting records. th Principle Independent internal verification * Employees review, compare, and reconcile data that was watchful by them.Three measure are recommended * An example cannot be provided for this principle because a customer cannot identify if * 1st Org. should verify records periodically or on a surprise basis. * 2nd A manager should sour the verification of an employee * 3rd Discrepancies and exceptions should be reported to mgt. to make appropriate disciplinary action. Chapter 7 Problem Set B P7-2BThe board of trustees of a local anesthetic perform is concerned ab bulge the internal accounting contro ls pertaining to the offering collections make at periodical services. They ask you to serve on a three-person examine team with the internal auditor of the university and a CPA who has just fall in the church service building. At a meeting of the audit team and the board of trustees you look into the following A) Indicate the weaknesses in internal accounting control in the handling of collections. There are a few weaknesses in internal control in the handling of collections for the church, such as there is no supervision when the leads incur money.There is a chance that the ushers can divvy up money from the collection plate. In addition, the financial repository manages three tasks resembling bank reconciliation, has control and has custody of the cash, and maintains the church records. Moreover, the financial secretary holds unwrap cash ($150-$200) per week different withhold amounts for cash expenditures. There is not a witness when the head care usher or the finan cial secretary count the money. Last, erupts are made payable to cash (Kimmel, Weygandt & Kieso, 2007).B) discover the improvements in internal control procedures that you plan to make at the close meeting of the audit team for Ushers How churches handle usher operations varies from convocation to congregation, but a consistent set of controls fosters the fiduciary integrity of the church, and creates say-so among donors. One problem in the collection process is that only the head usher counts the collection without any accountability to ensure his count is accurate, or that all of the funds donated are transferred to the safe.This can be resolved by having the other ushers count the donations and sign off on the report, so that much(prenominal) than one set of eyes have verified the donations. Additionally, offer ups lead fatality to collide with a course familiarizing would-be ushers with standard run procedures, and reporting standards before being qualified to vo lunteer for usher position. This pull up stakes help solidify controls for the ushers. Head Usher While the church may not be currently experiencing any issue wrong with the usher selection and volunteer system at the church, some improvements might be considered.The church might consider making the head usher a year-long term, elected by church atoms to create continuity, but likewise impose term limits perchance every 3-4 years a head usher must take a sabbatical. Additionally, because the head usher role is so pivotal in the collection process, and it is a place where mistakes or malfeasance can easily take place it would be helpful for the ushers and the financial secretary to be introduce in the collection counts, the day of, so someone outside the usher department can verify tithe counts.Financial Secretary The roughly glaring issue, which opens up easy access for, would be embezzlers in the congregations check policy. All checks being written to cash basically enable s anyone to cash out the check, the church, a rouge employee or volunteer, or otherwise. All checks need to be made out to the church, not to cash. It would be horizontal better if the church went the route of many churches by allowing donors to have donations processed monthly (or weekly depending on donor preference) through e-commerce, allowing debit or credit payments to be made automatically to the church account.This will add a story to the recording process, but it also increases security for donors. The financial secretary also unavoidably to stop pulling cash from weekly donations for cash expenditures as cash transactions are harder to track and thus are more easily abused. Instead a petty cash account needs to be started, and cash allocated as needed based on historical records of cash expenditures. Additionally, a church credit/debit card, or reimbursement policy greatly will diminish the need for high levels of cash in the petty cash account.Finance Committee The fi rst thing the pay committee needs to do is to follow its own policy, and conduct annual audits. The churchs 501 (C)(3) nonprofit designation demands this. Often the most believe employees are the ones who are found to have committed improprieties. Regardless of trust, uniform audits, and reporting is essential. The second major priority is for the financial committee to get a fidelity insurance policy that will protect the church in the case of financial impropriety or massive artifice on part of those who handle finances.In addition to the need for an overwhelm in policy (discussed below), the financial committee needs to inculcate a culture of financial vigilance and rigor to keep the church from even the perception of financial impropriety. C) What church policies should be changed to improve internal control? The church board of trustees is responsible of make sure that the church runs smoothly, from designate the right ministers to the right ministries and making sure t hat the tithes and offerings are accounted for after each service.The first and most important thing that the church needs to do is getting some fidelity insurance. This type of insurance will protect the church of losses that may result of fraudulent acts by stipulate individuals. Protecting the church of any dishonest employee or member who may steal money, securities, and other property that once belong to the church. The second thing is to have an audit conducted because there has not been an audit performed in 15 years. Highly recommend using an outside source of performing the audit, this way every rock and stone will be turn over.The church financial management department should be responsible for counting and recordkeeping of the tithes and offering received but in separate flecks, one office for counting the money and the other office for recordkeeping purposes The head usher responsibility should be making sure that the tithes and offering plates are accounted for and imm ediately delivering the plates (with one member from the board of trustee) to the financial management office (the financial office manager, and one individual from the board of trustees are the only ones with keys to both offices).The financial management recordkeeping personnel and the financial secretary should first come to an agreement on how much cash is needed for the week expense. Also the two will count the money with the intention to be deposit along with a deposit slip the financial secretary will be responsible of making the deposit and afterward returning the deposit receipt to the recordkeeping office for recording purposes.