Question

1.14 What internal control would you recommend to prevent the following situation from occurring? Identify one...

1.14

What internal control would you recommend to prevent the following situation from occurring? Identify one most effective internal control for each situation.  

Inventory was stolen by receiving dock personnel. The receiving clerk claimed the inventory was sent to the warehouse but the warehouse clerk did not record properly.

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Answer #1

Internal controls are the procedures employed by the management to safeguard its assets, prevent fraud, promote accountability, reliability on financial statements and compliance with rules and regulations.

Internal control
Inventory was stolen by receiving dock personnel. The receiving clerk claimed the inventory was sent to the warehouse but the warehouse clerk did not record properly. Supervision, Independent verification and records to track custody of Goods to determine responsibility.

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