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TP 1.

LO 8.2LO 8.4Visit a favorite eatery. Describe some of the internal controls that are implemented in the workplace. Discuss the good and effective internal controls and also discuss areas that need to be addressed where the eatery is vulnerable to losses.

TP 2.

LO 8.4A manufacturing plant was finding a huge increase in the scrapping of raw materials. Its internal controls were reviewed, and the plant appeared to be strong; segregation of duties was in place. As the accountant was reconciling some inventory accounts, she found more than a normal amount of scrap tickets. The tickets were for scrapping the same inventory part, signed by the same person, and the scrap was sold to only one company. The inventory item was still being ordered, and only one supplier was used to purchase the parts. After further investigation by the accountant, the company buying the inventory and the company selling the inventory to the company had different names but shared the same address. Comment on what went wrong. What happened to the internal controls the company had in place?

TP 3.

LO 8.4The vice president of finance asks the accounts payable (AP) clerk to write a check in the name of the president for $10,000. He and the president will sign the check (two signatures needed on a check of this size). He further instructs the AP clerk not to disclose this check to her immediate supervisor. What should the AP clerk do? Should she prepare the check? Should she inform her immediate supervisor? Discuss with internal controls in mind.

TP 4.

LO 8.4Even though technology has improved the internal control structure of a company, a supervisor cannot depend totally on technology. Discuss other internal controls a supervisor needs to implement to ensure a strong structure.

TP 5.

LO 8.6A bank reconciliation takes time and must balance. An employee was struggling in balancing the bank reconciliation. Her supervisor told her to “plug” (make an unsupported entry for) the difference, record to Miscellaneous Expense, and simply move on. Discuss the internal controls problem with this directive.

TP 6.

LO 8.6The bank reconciliation revealed that one deposit had cleared the bank two weeks after the date of the deposit. Should this be of concern? Why, or why not?

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