Below are some “suspicions.” You have been requested to select some effective extended procedures designed to confirm or deny the suspicions.
Write out the procedure you would suggest for each case so that another person would know what to do.
a. The custodian of the petty cash fund may be removing cash on Friday afternoon to pay for his weekend activities.
b. A manager has noticed that eight new vendors have been added to the purchasing department approved list since the assistant purchasing agent was promoted to chief agent three weeks ago. She suspects that all or some of them may be phony companies set up by the new chief purchasing agent.
c. The payroll supervisor may be stealing unclaimed pay-cheques of people who quit work and don’t pick up the last cheque.
d. Although no customers have complained, cash collections on accounts receivable are down, and the counter clerks may have stolen customers’ payments.
e. The cashier may have “borrowed” money, covering it by holding each day’s deposit until there is enough cash from the daily collection to make up the shortage, before sending the deposit to the bank.