Below are several scenarios related to control activities of a
Below are several scenarios related to control activities of a company?
1. A manufacturing company compares total sales in the current year to those in the previous year but does not compare the cost of production.
2. So that employees can have easy access to office supplies, a company keeps supplies in unlocked cabinets in multiple locations.
3. At the end of each day, a single employee collects all cash received from customers, records the total, and makes the deposit at the bank.
4. At the end of the year only, the company compares its cash records to the bank’s records of cash deposited and withdrawn during the year.
5. A company encourages employees to call an anonymous hotline if they believe other employees are circumventing internal control features.
6. All employees have the authority to refund a customer’s money.

For each scenario, determine which control activity is violated. Control activities include separation of duties, physical controls, proper authorization, employee management, reconciliations, and performance reviews. If no control activity is violated, state “none.”

Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
Relevant Tutors available to help