Question

What internal control procedure(s) would provide protection against the following threats?

a. Theft of goods by the shipping dock workers, who claim that the inventory shortages reflect errors in the inventory records.
b. Posting the sales amount to the wrong customer account because a customer account number was incorrectly keyed into the system.
c. Making a credit sale to a customer who is already four months behind in making payments on his account.
d. Authorizing a credit memo for a sales return when the goods were never actually returned.
e. Writing off a customer’s accounts receivable balance as uncollectible to conceal the theft of subsequent cash payments from that customer.
f. Billing customers for the quantity ordered when the quantity shipped was actually less due to back ordering of some items.
g. Theft of checks by the mailroom clerk, who then endorsed the checks for deposit into the clerk’s personal bank account.
h. Theft of funds by the cashier, who cashed several checks from customers.
i. Theft of cash by a waiter who destroyed the customer sales ticket for customers who paid cash.
j. Shipping goods to a customer but then failing to bill that customer.
k. Lost sales because of stock outs of several products for which the computer records indicated there was adequate quantity on hand.
l. Unauthorized disclosure of buying habits of several well-known customers.
m. Loss of all information about amounts owed by customers in New York City because the master database for that office was destroyed in a fire.
n. The company’s Web site was unavailable for seven hours because of a power outage.
o. Interception and theft of customers’ credit card numbers while being sent to the company’s Web site.
p. A sales clerk sold a $7,000 wide-screen TV to a friend and altered the price to $700.
q. A shipping clerk who was quitting to start a competing business copied the names of the company’s 500 largest customers and offered them lower prices and better terms if they purchased the same product from the clerk’s new company.
r. A fire in the office next door damaged the company’s servers and all optical and magnetic media in the server room. The company immediately implemented its disaster recovery procedures and shifted to a backup center several miles away. The company had made full daily backups of all files and stored a copy at the backup center. However, none of the backup copies were readable.



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  • CreatedDecember 19, 2014
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