The policy helps keep track of transactions of all orders and helps to
avoid theft by making sure that all orders are accounted for.
Customer checks with pre-numbered sequence codes would be used
by smaller companies that do not have an electronic system, but even
electronic systems have order numbers to be able to track all
transactions. Customer checks should be reconciled to the actual
sales to make sure that there are no discrepancies, and the voided
checks should not be destroyed as an internal control to make sure
that all checks are accounted for, this also helps to know who
oversaw the checks in case there is a discrepancy. These are
independent checks on performance that needs to be done to avoid
fraud at the workplace, examples include Reconciliation of
independently maintained records, comparison of actual quantities
with recorded amounts, and independent review. (Romney, Steinbart,
Summers, & Wood, 2020) It is important that a second person can
take a look at the transactions and has enough information to look at
the transactions and make that all receipts and payments are equal
and if there is a discrepancy that they have enough supporting
documents to figure out what is missing and to have an audit trail,
which allows transactions to be traced back to and forth between
their origination and the financial statements. (Romney, Steinbart,
Summers, & Wood, 2020) An electronic system may be more efficient
in keeping track of cash receipts, but I believe that it is important to
have internal controls and good preventive controls to deter
problems before they arise like hiring qualified personnel, segregating
employee duties, and controlling physical access to assets and
information. (Romney, Steinbart, Summers, & Wood, 2020) I do
believe that the board of directors and top management must set the
proper tone at the top, they need to demonstrate through their
actions that they support the integrity and the necessity for a strong
internal control system, and this will lead to employees behaving
responsibly. (Romney, Steinbart, Summers, & Wood, 2020)
Bibliography
Romney, M. B., Steinbart, P. J., Summers, S. L., & Wood, D. A. (2020).
Accounting Information Systems. Pearson.
