The most likely result of ineffective internal control policies and procedures in the revenue cycle is that: answer: shipments to customers were invoiced.

Which of the following controls most likely would help ensure that all credit sales transactions of an entity are recorded? The billing department supervisor matches prenumbered shipping documents with entries in the sales journal.

Preventing Lapping of Accounts Receivable In order to prevent lapping, the duties of the clerk responsible for recording the accounts receivable subsidiary ledger should be segregated from that of recording in the general ledger.

When performing an audit, a CPA notes that bad-debt expense is unusually high relative to similar firms in the industry.

The correct answer is letter “A”: An inherent limitation to internal control is the fact that controls can be circumvented by management override.

Good internal controls are essential to assuring the accomplishment of goals and objectives. They provide reliable financial reporting for management decisions. They ensure compliance with applicable laws and regulations to avoid the risk of public scandals.

What is the definition of internal control?

• effectiveness and efficiency of operations;
• reliability of financial reporting; and.
• compliance with applicable laws and regulations.

Management is responsible for establishing internal controls. In order to maintain effective internal controls, management should: Maintain adequate policies and procedures; Communicate these policies and procedures; and.

Here is a five-step process to follow when developing and implementing effective internal controls in an organization:

1. Step 1: Establish an Appropriate Control Environment.
2. Step 2: Assess Risk.
3. Step 3: Implement Control Activities.
4. Step 4: Communicate Information.
5. Step 5: Monitor.

Internal controls ensure that the financial statements published are correct. The only role of internal controls is to protect customer data. Internal controls and company policies are important to protect and safeguard assets and to protect all company data and are designed to protect the company from fraud.

3 policies to protect cash at a small business

• Internal control 1: Require your employees to take a vacation.
• Internal control 2: Do your bank reconciliations.
• Internal control 3: Lock stuff up.

– Human Resource Policies and Practices: The most important aspect of internal control is personnel. If employees are competent and trustworthy, other controls can be absent and reliable financial statements will still result.

Effective internal control reduces the risk of asset loss, and helps ensure that plan information is complete and accurate, financial statements are reliable, and the plan’s operations are conducted in accordance with the provisions of applicable laws and regulations.

Internal controls play a critical role not only in public companies but also in private companies, because internal controls establish safeguards to an organization’s assets and minimize the opportunities of committing fraud and allowing errors to go undetected in an organization’s daily operations.

Internal control accounting systems are the policies and procedures used to ensure accuracy and reliability across accounting reports to: Prevent fraud. Generate timely, reliable reporting. Measure progress towards business objectives and goals. Comply with applicable laws and regulations.

The main internal control principles include:

• Establish Responsibilities.
• Maintain Records.
• Insure Assets by Bonding Key Employees.
• Segregate of Duties.
• Mandatory Employee Rotation.
• Split Related Party Responsibility.
• Use Technological Controls.
• Perform Regular Independent Reviews.

The basic principles of auditing are confidentiality, integrity, objectivity, and independence, skills and competence, work performed by others, documentation, planning, audit evidence, accounting system and internal control, and audit reporting.