1) b How does this policy help the restaurant control cash receipts?
This policy of giving each check a number and requiring each check
to be turned in is a great control to have in place for cash receipts if a
digital process is not available. This policy creates a paper trail to
follow in the event there is a discrepancy, in addition of sequencing
checks to research if any documents are absent or have been
duplicated. It not only saves times but makes it an easier time to
narrow down the responsible party, especially when you are dealing
with multiple employees and multiple shifts. This allows for a better
assessment of risk and removal of employees that frequently cause
discrepancies. This policy also helps deterring multiple types of theft
from the organization. By requiring checks with mistakes to be
voided and turned in, it leaves zero room for potential excuses for
fraud to be attempted around the system. Additionally, with checks
having to be turned in daily, such as immediately after an employee's
shift, it decreases the time in which fraud has to occur, thus
decreasing the risk that could occur.
2) b Do you think there is a more efficient way to control cash
receipts? Explain.
While I find this method to be efficient, it should be used in
conjunction with other methods to be more efficient. One of these
controls is the segregation of duties. For example, the employees are
responsible for turning the checks into the manager at the end of the
day, the manager is responsible for making sure there are no gaps or
duplicates in the sequence. If a gap/duplicate is located, they are
responsible to bring it up to the owner. The owner is responsible for
monthly audits to make sure all checks are accounted for. The
reasoning for this is that there is a chance for the manager to
potentially mark all checks are received in the sequence for the night,
and then potentially cause fraud themselves. Another control is to
make sure any voided checks have two signatures on them. For
instance, the employee could void the check after receiving the funds
as a way to commit fraud. The voided check would not be flagged
initially as fraud due to the fact that the sequence continues without
duplication. By requiring the signature of the employee and the
manager, it creates an additional level of accountability to decrease
the risk of fraud. This is similar to Wells (2003) assessment that fraud
can occur due to too much trust in employees but needing to have
level of trust to function.
References
Syracuse University. (n.d.). Internal controls for cash receipts and
revenue. Retrieved on December 1st, 2022, from
https://bfas.syr.edu/audit/general-internal-controls/internal-
controls-for-cash-receipts-and-revenue/
Wells, J.T. (2003, February 28). Protect small business. Retreived on
November 28th, 2022, from
https://www.journalofaccountancy.com/issues/2003/mar/protects
mallbusiness.html
