US CMA Part 1 · Chapter 5 · Question 22 of 23
In a small company, the mail is opened by a receptionist who prepares a list of all checks received. Which additional procedure would most strengthen control over cash receipts?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Sending the list to a person independent of cash handling and record-keeping, who compares it with the bank deposit slip and the receivables postings
Explanation
An independent comparison of the original remittance list with the deposit and the accounting records provides a detective control over cash receipts. Giving the receptionist recording duties combines custody and recording, a list prepared by the cashier is not independent, and delaying deposits increases the risk of loss.
More Internal Controls MCQs
- Q1Which of the following is NOT one of the five components of internal control in the COSO Internal Control - Integrated Framework (2013)?
- Q2Management's integrity, ethical values and 'tone at the top' are part of which COSO internal control component?
- Q3Which combination of duties for a single employee represents the most serious weakness in segregation of duties?
- Q4A monthly bank reconciliation prepared by an employee who has no access to cash is an example of which type of control?
- Q5Why can an internal control system provide only reasonable, rather than absolute, assurance that objectives will be achieved?