HARTSHORN MANUFACTURING COMPANY Statement The Hartshorn Manufacturing Company of Wichita, Kan- sas, recently engaged a public...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
HARTSHORN MANUFACTURING COMPANY Statement The Hartshorn Manufacturing Company of Wichita, Kan- sas, recently engaged a public accountant to review its various transaction processing procedures. During her review of the expenditure cycle, the public accountant made the following notes. A production supervisor initiates a purchase by call- ing the purchasing department on the phone and stating his request. A buyer then prepares a letter concerning the requested materials, mails the letter to a supplier, and files his copy in the supplier's file folder. As the materials arrive, they are laid in any convenient area un- til the storeskeeper has an opportunity to store them in their bins or until the production supervisor carts them directly to the production line. When the supplier's in- voice reaches the accounting department, an accounting clerk enters the invoice in the purchase journal. Near the end of each month the clerk prepares an unnumbered check for the amount of the invoice, has the treasurer sign the check, and mails the check to the supplier. Then the same clerk enters the amount of the check in the check register, posts the amount to the subsidiary ledger account sheet for the supplier, and files the check copy by supplier's name. Just before the trial balance is pre- pared, the same clerk totals the various special journals and posts the totals to the general ledger. When the workload is too heavy for this single clerk to perform, another clerk is assigned to handle those invoices from suppliers whose names begin with letters from N to Z. No one at any time counts the materials on hand, com- pares documents involved in a particular transaction, or reconciles accounting ledgers. When asked why such checks are not made, the accounting clerk replies that there is not enough time in a day and that the more urgent tasks have to be done. Required Analyze weaknesses in accounting control and suggest improvements. HARTSHORN MANUFACTURING COMPANY Statement The Hartshorn Manufacturing Company of Wichita, Kan- sas, recently engaged a public accountant to review its various transaction processing procedures. During her review of the expenditure cycle, the public accountant made the following notes. A production supervisor initiates a purchase by call- ing the purchasing department on the phone and stating his request. A buyer then prepares a letter concerning the requested materials, mails the letter to a supplier, and files his copy in the supplier's file folder. As the materials arrive, they are laid in any convenient area un- til the storeskeeper has an opportunity to store them in their bins or until the production supervisor carts them directly to the production line. When the supplier's in- voice reaches the accounting department, an accounting clerk enters the invoice in the purchase journal. Near the end of each month the clerk prepares an unnumbered check for the amount of the invoice, has the treasurer sign the check, and mails the check to the supplier. Then the same clerk enters the amount of the check in the check register, posts the amount to the subsidiary ledger account sheet for the supplier, and files the check copy by supplier's name. Just before the trial balance is pre- pared, the same clerk totals the various special journals and posts the totals to the general ledger. When the workload is too heavy for this single clerk to perform, another clerk is assigned to handle those invoices from suppliers whose names begin with letters from N to Z. No one at any time counts the materials on hand, com- pares documents involved in a particular transaction, or reconciles accounting ledgers. When asked why such checks are not made, the accounting clerk replies that there is not enough time in a day and that the more urgent tasks have to be done. Required Analyze weaknesses in accounting control and suggest improvements.
Expert Answer:
Answer rating: 100% (QA)
Based on the information provided there are several weaknesses in the accounting controls of Hartshorn Manufacturing Company Here are the weaknesses identified and suggestions for improvements 1 Lack ... View the full answer
Related Book For
Auditing Assurance Services and Ethics in Australia an Integrated Approach
ISBN: 978-1442539365
9th edition
Authors: Alvin A Arens, Peter J. Best, Greg Shailer, Brenton Fiedler
Posted Date:
Students also viewed these accounting questions
-
Q 3 The Figure below shows that a steam turbine receives water at 1 2 . 5 MPa and 6 0 0 \ deg C at 1 0 0 kg / s . In the middle section, 2 5 kg / s is withdrawn at 4 MPa, 4 0 0 \ deg C , and the rest...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
In 2012, the average credit score for loans that were purchased through Fannie Mae was 766. A random sample of 35 mortgages were selected, and it was found that the average credit score was 771with a...
-
Presented below are selected balance sheet information and the income statement for Burch Company. Selected Balance Sheet Information Burch Company Income Statement For the year ended December 31,...
-
Bradburn plc was formed 5 years ago through a public subscription of ordinary shares. Daniel Brown, who owns 15% of the ordinary shares, was one of the organizers of Bradburn and is its current...
-
For all parts of this question, assume that interest rate parity exists, the prevailing 1-year U.S. nominal interest rate is low, and that you expect U.S. inflation to be low this year. a. Assume...
-
Solve the following LP problem using level curves. MAX: 4X1 + 5X2 Subject to: 2X1 + 3X2 120 4X1 + 3X2 140 X1 + X2 80 X1, X2 0
-
XYZ Inc. provides the following information for the year ended December 31, 2023: Item Amount ($) Direct Materials 20,000 Direct Labor 15,000 Factory Overhead 5,000 Sales Revenue 100,000 Required:...
-
International Foods, a U.S. company, acquired two companies in 2013. As a result, its consolidated financial statements include the following acquired intangibles: Intangible Asset Date of...
-
5. What is the output of the following program? Please briefly describe how do you get the output. (5 points) public class SumArray{ public static void main(String[] s) { // number is a array...
-
Capital budgeting involves decisions about whether or not to invest in fixed assets, and has a great influence on the future performance and value of companies. Discounted cash flow analysis is used...
-
There is an obvious direct correlation between the rise in the number of Americans without healthcare insurance and the volume of uncompensated care provided by the medical industry. The Health and...
-
Search about the company and answer the following questions, 1: Do some research about sustainable practices adopted by this company. How is this company contributing to sustainability (if they are...
-
According to the graph below, at what point will reducing your amount of diversifiable risk in a portfolio become very difficult? 49.2% Risk (Portfolio Standard Deviation) 19.2% # of securities in...
-
Q3: Seasonality Analysis: Demand Month 2020 2021 January 1150 1250 2022 2023 1270 1120 February 1250 1400 1550 1350 March 1150 1200 1300 1370 April 1400 1450 1500 1105 May 1110 1250 1600 1350 June...
-
Question1 : According to James Marcia, What does exploration and commitment mean? Question 2: Which statements are correct when it comes to the context of intercultural identity? Tick the correct...
-
Solve each problem. Find the coordinates of the points of intersection of the line y = 2 and the circle with center at (4, 5) and radius 4.
-
What responsibility does the auditor have for information on the company's website that may be linked to electronic versions of the company's annual financial statements and auditor's report? How...
-
Don Spark recently joined the public accounting firm of Watts & Ampage. He quickly established a reputation for thoroughness and a steadfast dedication to following prescribed auditing procedures to...
-
What is an assurance engagement? How does it differ from an audit?
-
Suppose a company has five-year, semiannual-coupon bonds carrying an 8 percent coupon rate that are selling for $1,200. What would be the aftertax cost of debt on these bonds if the appropriate tax...
-
Suppose a company has five-year, semiannual-coupon bonds carrying an 8 percent coupon rate that are selling for $1,200. What would be the beforetax cost of debt on these bonds if the appropriate tax...
-
Suppose a firm has 19 million shares of common stock outstanding with a par value of \($1.00\) per share. The current market price per share is \($18.35\). The firm has outstanding debt with a par...
Study smarter with the SolutionInn App