Question

You are asked as the accountants for Cookie Creations to make recommendations to insure the internal controls are adequate. Assume that you are presenting your recommendations to the Board of Directors. What suggestions would you make? My topic of inernal controls is human resource controls

Answer 1

Recommendations to insure Internal Controls are adequate are-

1. Administrative and financial powers should be distributed among different personnel.

2. A single person should not have independent control over any important aspect of business.

3. Person having physical custody of assets should not have access to accounts and records

4. Duties of staff should be changed from time to time without any notice.

5. If there is any difference in budgeted and actual figures that should be enquired.

6. Every employee must be supervised by another employee.

7. To prevent misappropriation of cash mechanical devices can be employed.