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The payroll clerk violated the separation of duties principle by recording hours, preparing a paycheck, forging a signature, and cashing the check for an employee who had quit. To reduce risk, the company should implement a clear workflow where payroll prepares paychecks which are then reviewed and signed by HR and accounting before being issued by the cashier.
A cashier prepared a fake invoice from a fake company using his brother-in-law's name. This violates the separation of duties as cashiers should not be able to create invoices. To prevent this, invoice creation should be restricted to the accounts payable department and all invoices must be reviewed by the finance manager before any payment.
A cashier cashed a
The payroll clerk violated the separation of duties principle by recording hours, preparing a paycheck, forging a signature, and cashing the check for an employee who had quit. To reduce risk, the company should implement a clear workflow where payroll prepares paychecks which are then reviewed and signed by HR and accounting before being issued by the cashier.
A cashier prepared a fake invoice from a fake company using his brother-in-law's name. This violates the separation of duties as cashiers should not be able to create invoices. To prevent this, invoice creation should be restricted to the accounts payable department and all invoices must be reviewed by the finance manager before any payment.
A cashier cashed a
The payroll clerk violated the separation of duties principle by recording hours, preparing a paycheck, forging a signature, and cashing the check for an employee who had quit. To reduce risk, the company should implement a clear workflow where payroll prepares paychecks which are then reviewed and signed by HR and accounting before being issued by the cashier.
A cashier prepared a fake invoice from a fake company using his brother-in-law's name. This violates the separation of duties as cashiers should not be able to create invoices. To prevent this, invoice creation should be restricted to the accounts payable department and all invoices must be reviewed by the finance manager before any payment.
A cashier cashed a
Problem : Explain how the principle of separation of duties is
violated in each the following situations. Also suggest one or more
procedure to reduce risk, and exposure highlighted in each of example. Solving Problems: a. A payroll clerk recorded 40-hour workweek for an employee who had quit the previous week. He then prepared a paycheck for this employee, forged her signature, and cashed the check. Violation: The payroll clerk only have an authority to prepare the paycheck, not to signature or cashed the checks. The signature of payroll is the duty of HR manager, while cashed the paychecks is the duties of the cashier, so, the payroll clerk has violated his/her job description and his/her authorities. Solution: To reduce the risk, the company must make a clear workflow, the payroll clerk must be ensured only has an authority to make the paycheck, then from the payroll clerk, every paycheck must be received to HR manager to check it, if its agreed, then from the HR, it will brought to finance department, and it must be received by the A/P department first, the A/P department will make the invoice for the payment and then its delivered to finance manager for the second check point. After the finance manager agree, then the cashier will make the check for the payment. Before the check is cashed, the cashier must have the assignment first from the finance manager. With this workflow, it can reduce the risk which is cause with the problem above. Cashier has no right to make an invoice Solution Company should have a difference among the employees jobs. and the finance manager can check the invoice to the A/P department. An employee of finishing department walked off with several parts from the store room and recorded the items as having been issued to the assembly department. and to book keeping department. so the cashier will not able to make an electronic payment if the invoice not be delivered to the finance manager first. Violation: Cashier is not have a right to make an invoice. cashier set aside. the invoice must be prepared by A/P staff. to purchasing. so if the cashier trying to make fictious invoice it can be checked easily in A/P department from the invoice number. Solution: To avoid this problem. it must be connected to cashier. And every invoice must be received by the finance manager first if the company wanna make a payment to anyone. and the cashier can not make a payment before they got the assignment from the finance manager. The invoice must be prepared by A/P staff c. He sent an electronic payment for the invoice to his brother in law. two checks payable to the company on account. to cash control. Then the system which is used must be online and connected to every department in finance. A cashier prepared a fictious invoice from a company using his
brother-in laws name. .b. and it will be proved fictious because in
the A/P department theres no data about the invoice which is fake and made by the cashier. Violation: Cashier should be able to separate the things. so it can easily known if the invoice is fake. d. there is no clear job description in this problem. Every invoice must be has a clear number of invoice. the company must be make sure that the right to make an invoice must be in A/P department. and subsequently cashed. While opening the mail. it will be the cashier staffs responsibility to prove whats happen to the money. in the journal and ledger. If thats not equal. the journal will be cash in debet to A/R in credit.Violation: The things have been recorded are not able to be recorded twice. pocketed the cash. so the cashier can do this. A cashier cashed a check from a customer in payment of an account receivable. and conceal the theft by properly posting the receipt to the customer account in the accounts receivable ledger. There should not have a fraud in the record e. . This means there are money in to the company so every month we can calculated the amount of money we received and the A/R that has been liquidated become cash and we can see if the money that we have received is it equal or not with the amount of A/R that has been liquidated become cash. This problem probably can happen because of the weak internal control. theres no tight controlling in cash receiving. when that fraud cashier staff posting the receipt to the customer account in the A/R. The cashier has violated the ethics of work with do this. Because it will affect the other things Solution: There must be a control of accounting records in the specific accounts. Violation: This is a fraud problem. Solution: There must be a cash check every the end of the month.