Required:

Which internal controls$)$ would you recommend to prevent the following situations from occurring?

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Situation

$$Authorization of a credit memo for a customer's account $($on receivables$)$ when the goods were never actually returned

$$Theft of funds by the cashier, who cashed several checks and did not record their receipt.

$$Inventory stolen by receiving dock personnel. The receiving clerk claimed the inventory was sent to the warehouse, but the warehouse clerk did not record properly.

$$Writing off a customer's accounts receivable balances as uncollectible in order to conceal the theft of subsequent cash collections.

$$Billing customers for the quantity ordered when the quantity shipped was actually less due to back$-$ordering of some items.

Answer

Documents and records

Independent verification

Segregation of duties

Supervision