An internal control system consists of all policies and procedures used to protect assets, ensure reliable accounting, promote e
fficient operations, and urge adherence to company policies. Evaluate each of the following statements and indicate which are true and which are false regarding the objectives of an internal control system. 1. Separation of recordkeeping for assets from the custody over assets is intended to reduce theft and fraud.
2. The primary objective of internal control procedures is to safeguard the business against theft from government agencies.
3. The main objective of internal control procedures is best accomplished by designing an operational system with managerial policies that protect the assets from waste, fraud, and theft.
4. Separating the responsibility for a transaction between two or more individuals or departments will not help prevent someone from creating a fictitious invoice and paying the money to herself or himself.
Separation of record keeping for assets from custody over assets in custody over assets reduces theft and fraud . except in a case of collusion.
Fraud and theft of assets can be easily perpetrated and covered up when an individual combines the role.
2. False
Internal control focuses more on the internal operation of an organization rather than the external. Even though it can still be of impact in checking the excesses of external parties like the government agencies , but that is not its primary objective
3.True
Internal control's main objectives can be best accomplished when there is an operational system with managerial policies that protect waste , fraud and theft , being the major factors targeted to control
4.False
Separating the responsibility for a transaction between two or more individuals or departments is a major way of preventing creation of fictitious invoices and payment as it could have easily be detected if different individuals are involved in approval and payment of invoices.
The system's performance is gauged only by the level of service. The quality of service specifies the percentage of such goals which should be met. That likelihood of stock remaining in inventory based on a set level of Security Stock is referred to as the service level. Ex: In a contact center, the number of calls that are addressed. That percentage of consumers who have waited less than a fixed amount of time.
<h2>Joshua would lose and Sue would benefit from unanticipated inflation.</h2>
Explanation:
Both Joshua and Sue are associated with fixed pension and fixed interest respectively.
Now the value of money goes down due to inflation
So to live as usual, Joshua need to spend some extra money. But considering the fixed income, it's a lose to Joshua
Whereas Sue is associated with fixed interest of mortgage. She is benefited because, though the inflation has changed the value of all other products, but the fixed interest rate does not change.
"Fixed-rate mortgage holders are inflation winners", says "Thoma, professor of economics at the University of Oregon"
Accounting or accountancy is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations.
