Identify the internal control principle that is applicable to each procedure.?

Ndon Company has the following internal control procedures over cash disbursᴇмᴇɴts.

Identify the internal control principle that is applicable to each procedure. (Options: Independent Internal Verification, Human Resource Controls, Physical Controls, Documentation Procedures, Segregation of duties, and Establishment of responsibility)

(a) Company checks are prenumbered.

(b) The bank statement is reconciled monthly by an internal auditor.

(c) Blank checks are stored in a safe in the treasurer’s office.

(d) Only the treasurer or assistant treasurer may sign checks.

(e) Check signers are not allowed to record cash disbursᴇмᴇɴt transactions.

1 Answer

  • (a) Company checks are prenumbered.

    Documentation procedures

    (b) The bank statement is reconciled monthly by an internal auditor.

    Independent Internal Verification

    (c) Blank checks are stored in a safe in the treasurer’s office.

    Physical controls

    (d) Only the treasurer or assistant treasurer may sign checks.

    Establishment of Responsibility

    (e) Check signers are not allowed to record cash disbursᴇмᴇɴt transactions.

    Segregation of Duties

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