Reference no: EM13569119
1. For each of the following potential errors, identify a control procedure that would most likely be effective in preventing or detecting the problem; select the appropriate control procedures from the listed provided (A through L). Control procedures may be selected once, more than once, or not at all.
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1. Credit sales are made to individuals with unsatisfactory credit ratings.
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2. Employees receive unauthorized rate increases.
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3. Vendor invoices are paid for more goods than were received.
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4. Fictitious employees are added to payroll.
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5. Sales invoices for goods are posted to incorrect customer accounts.
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6. Goods shipped to customers do not agree with goods ordered by customers.
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7. Customer checks are misappropriated before being forwarded to the cashier for deposit.
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8. The receiving clerk fails to count the goods received.
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9. Customer checks are received for less than the customer's full account balances, but the customers' full account balances are credited.
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10. Terminated employees remain on the payroll.
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A. Approved sales orders are required for goods to be released from the warehouse.
B. Monthly statements are mailed to all customers with outstanding balances.
C. Shipping clerks compare goods received from the warehouse with approved sales orders.
D. Customer orders are compared with the approved customer list.
E. Supervisors approve time cards.
F. The personnel department authorizes all new hires.
G. The personnel supervisor's password is required to make rate changes.
H. Exit interviews are required b the personnel department, which forwards documents to payroll.
I. The vendor invoice, receiving report, and purchase order are matched before the voucher is approved for payments.
J. The voucher package and supporting documents are cancelled when checks are signed.
K. The purchasing department sends a "blind" copy of the purchase order (i.e., without the quantity) to the receiving clerk.
L. Total amounts posted to the accounts receivable ledger from remittance advices are compared with the validated bank deposit slip.