Internal Cash Controls Essay

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INTERNAL CASH CONTROLS Internal Cash Controls Rhonda Porter University of Phoenix Internal Cash Controls Cash is the life flow of any companies large or small. Internal cash control is a very important part of any company. A company needs to be able to know at any moment where their cash comes in and goes out. Cash is the beginning of a company’s operating cycle; it is usually the starting point for a company’s system of internal control. The internal cash controls for the Idaho based company have weaknesses over their cash disbursement processes. The weakness that I have seen were the fact their checks are not prenumbered. Also that only two people are involved in the process, I think more steps needs to be taken to have more checks and balances in the system to avoid accounting errors or fraudulent activities. The following is a memo to the company’s CEO about some of its procedures. Memorandum To: Idaho Company CEO From: Rhonda Porter, Analyst Date: 2/26/2012 Re: Internal Cash Controls I feel some of your procedures need some improvement. I feel that you need to have your checks to be prenumbered. You could purchase a check writing system to go along with the prenumbered checks. Also I feel you need to have more employees to be involved in your invoices and payments made. You should have someone different to reconcile your books other than treasurer who approves and pays some of the company’s bills. I hope you can take these suggestions and improve your procedures before any problems could arise in your internal cash controls. The Guard Dog company uses the following internal control principles and application to cash disbursements: Establishment of responsibilities; segregation of duties; documentation procedures; physical, mechanical and electronic controls; and independent internal verification. It seems that the

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