Communication Actitivy Essay

As another inspector for the CPA firm of Croix, Marais, and Kale, you have been allocated to survey the inner powers over mail money receipts of Manhattan Company. Your survey audits the accompanying: checks are speedily embraced â€Å"For Deposits Only†, yet no rundown of the checks is set up by the individual opening the mail. The mail is opened either by the clerk or by the representative who keeps up the records receivable records. Mail receipts are stored in the bank week after week by the clerk. Directions: Write a letter to Jerry Mays, proprietor of the Manhattan organization clarifying the shortcomings in interior control and your suggestions for improving the framework. Mr. Jerry Mays Manhattan Company Dear Mr. Mays RE: INDENTIFICATION OF WEAKNESSES IN INTERNAL CONTROLS As your recently delegated evaluators, Croix, Marais, and Kale (â€Å"CMK† or â€Å"we†) are commanded by the extent of our agreement to audit the interior powers over mail money receipts (the â€Å"process†) of Manhattan Company (the â€Å"Company†). As a major aspect of the survey, we will likewise give a few suggestions to improving any recognized shortcomings in the inward control arrangement of the Company. The survey of the procedure recognized the accompanying, which we will arrange as shortcomings in the interior control of the framework: * Although checks are expeditiously embraced â€Å"For Deposit Only†, no rundown of the checks is set up by the individual opening the mail; * Mail is opened by the clerk or by the worker who keeps up the records receivable records; and * Mail receipts are stored in the bank week after week by the clerk For each of the previously mentioned, we will give a clarification of the shortcoming just as our proposals for development. The checks supported, as â€Å"For Deposit Only† is a generally excellent inner control instrument. The support is prohibitive and lessens the probability that somebody could redirect the check for individual use, as banks won't give singular money when given a watch that has this sort of underwriting. In any case, a shortcoming of the procedure lies in the way that no copy of the rundown of the watches that are gotten is set up by the individual opening the mail. This is a case of a record strategy blemish all the while and anâ internal control shortcoming. Without the planning of a copy list just as getting paperwork done for the receipt of the checks, there is no follow that the occasion of receipt of the checks has happened. By requiring marks and setting up a copy rundown of the checks, the Company can distinguish the individual liable for the occasion. To this inside control shortcoming, we would suggest the foundation of obligation, where just an assigned individual †a mail receipt representative will be approved to deal with checks got by means of mail. The mail receipt representative ought to get ready in copy, a rundown of the checks got every day and sign the rundown to set up obligation regarding the receipt of the information. As a major aspect of the procedure, the first duplicate of the rundown, alongside the checks ought to be sent to the cashier’s office for the readiness of the day by day money outline. Furthermore, the mail receipt representative ought to send a duplicate of the rundown to the treasurer’s office, if there is one for compromise purposes with the every day money synopsis. As referenced above, we saw that the mail is opened by the clerk or by the representative who keeps up the records receivable records. This is a blemish in the inside control of the procedure identified with the isolation of obligations or detachment of capacity. The cashier’s office is liable for the readiness of the day by day money outline and in this manner ought not be a similar individual opening the mail of money receipts, which is a related action. Various people ought to be liable for any related action. An exploitative clerk can downplay the chronicle of the mail money receipts and report an alternate sum on the day by day money synopsis for individual advantages. As needs be, we would suggest the foundation of duty, where just an assigned individual †a mail receipt repr esentative will be approved to deal with checks got by means of mail. Furthermore, we suggest the isolation of obligations, where various people get the mail money, record the receipts and hold the money. This will guarantee that various people are answerable for any related movement and that the obligation regarding record saving for the money is discrete from the physical authority of the money. At long last, we likewise saw that the clerk stores mail receipts in the bank week by week. The inward stockpiling of money on the premises of the Company isn't fitting for evident reasons-burglary, theft, and unapproved get to. Representatives with different goals can make outside associates aware of attack or ransack the Company around evening time or at some other point to access the money put away onâ the premises. Furthermore, the capacity of the money on the premises presents a â€Å"working hazard† for the representatives as pariahs needing to access the money may expose them to undesirable assaults. The utilization of a bank regularly contributes altogether to great inner authority over money. The organization can shield the money consistently by utilizing a bank as a safe and in this manner limiting the measure of cash that the Company has available anytime during the week. Furthermore, the utilization of the bank on the regular schedule encourages the control of money since it makes a twofold record of all bank exchanges †one by the Company and one by the bank. Additionally we suggest that all receipts be stored in the bank regularly versus the current act of week by week stores. In rundown, if the board actualizes the above proposals, the Company will be in a superior situation to defend its benefits from worker burglary, theft, and unapproved use. Also, the company’s bookkeeping records will be upgraded in its precision and unwavering quality because of the decrease in the danger of mistakes and anomalies. We are accessible to additionally examine with Company the executives and expectation that the proposals will be actualized when practicable. We anticipate working with the board on this activity. Reference Weygandt, J. J., Kimmel, P. D., and Kieso, D. E. (2008). Money related bookkeeping: 2010 custom release (sixth ed.). Hoboken, NJ: John Wiley and Sons.