Internal Control Case Study Example | Topics and Well Written Essays - 500 words

Internal Control - Case Study Example The $500 check would have had to be mailed to someone other than the cashier. In addition to the cashier being unable to write a check to himself, the checks should have been kept under lock and key. This would require another person to authorize the writing of a check. The ability of the cashier to deposit a check into petty cash would have been avoided by the use of an imprest account. That would have required the petty cash fund to be replenished through a voucher system. The cashier would not have been able to make a deposit without the cooperation of another individual. All petty cash payments and deposits are then accounted for. The situation also could have been avoided by segregating the duties of the payment from the petty cash fund and the deposit into the fund. This again would limit the ability of the cashier to make the fund appear reconciled by the diversion of other funding. In addition, the bank reconciliation should be accomplished by someone other than the person writing the checks. The cashier was able to falsify the reconciliation to cover the movement of the funds. If an independent individual had done the reconciliation, his crime would have been prevented. The cashier should also not have been allowed to alter the invoice that was sent to Customer A that reflected the $500 payment.