For each of the following two situations, determine which principle of internal control has been violated.

1. Owner takes daily cash receipts home and makes a bank deposit the next morning.

Choose One ?

Establishment of authority and responsibility.

Segregation of duties.

Documentation procedures.

Mechanical, physical, and electronic controls.

Independent internal verification.

Bonding of employees who handle cash.

Employee job rotation and mandatory annual vacations.

2. Purchase orders may be written by all department heads.

Choose One ?

Establishment of authority and responsibility.

Segregation of duties.

Documentation procedures.

Mechanical, physical, and electronic controls.

Independent internal verification.

Bonding of employees who handle cash.

Employee job rotation and mandatory annual vacations.

 

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