Cash Management

Cash Management

Introduction

The system of the internal cash control might be defined as a technique of checking, monitoring and protecting the assets and the cash of a business entity in relation to the accuracy is well the reliability for the sake of promoting operational efficiency and making it less limited for the accounting and the financial departments (Anonymous, 2012).

E4-5

The weaknesses which are found in the Idaho Company which are related to the internal cash controls are the accessibility of the cheques by two people which are the purchasing agent and the treasurer in the organization. Out of the two the purchasing agent must only have an authority of signing the invoices without having an access to the cheque books. In case of giving the access to the check books of the Idaho Company it might cause fraud treatments in the billing system. The supplier and purchasing agent might be doing such collectively and they may inflate the value of the bills.

On the other hand purchasing agent must be verifying the mathematical adequacy of all of those bills. There are always chances of some vested interest among suppliers and purchases person. The purchaser must only verify the bills for checking out the accuracy and all bills must have been prepared by the treasury departments independently after checking for its correctness by making use of an effective system of internal control. It is an understood thing that the person who is responsible for the preparation of the invoices must not be verifying the invoice and accepting cash or even the cheques (Kieso et al, 2003).

According to my suggestion the treasurer must be one and only person who should have the authority for making cheques and receiving the payments. The role of procurement agent is only to check the genuineness of goods which are received and confirming all the required specification.

P4-1A

The system of the internal control in the Guard Dog Company is really well with an appreciatable conceptualization. The principle of separating the duties is incorporated. The purchasing agent Jane bell is the one who has to authorize all the invoices which must be sanctioned for their accuracy this will be done through the clerk of receiving department, Dennis Kurt. Cheques which are at this point pre-numbered must be signed by the treasurer or at least the assistant treasurer. Consequently the similar person is not accountable for keeping record of assets and ...