POA

Question 1

Purpose of having Internal Controls

Answer 1

> safeguard assets of the business
ensure transactions are recorded correctly
comply with laws and regulations
reduce the chances of theft, recording errors to ensure the cash is well protected

Question 2

Segregation of Duties

Answer 2

Separate cash handling and cash recording duties (different employees does each job)

Question 3

Custody Of Cash

Answer 3

Secure cash and cheques in a locked storage

Question 4

Authorisation

Answer 4

Obtain proper approvals for all payments from authorized personnel (at least 2 different people) e.g. Signatures

Question 5

Bank Reconciliation

Answer 5

Compare business records with bank records to identify items that caused the differences between ending balances of CAB account and bank statement

Question 6

Why is there a difference between ending balances of CAB and BS?

Answer 6

Due to timing differences:
- Bank has recorded transaction but business haven’t
- Business has recorded but bank hasn’t
- Error in CAB or BS