Internal Control procedures

e3A. A list of control procedures follows.

 

a.    Authorization

b.    Recording transactions

c.    Documents and records

d.   Physical controls

 

e.    Periodic independent verification

f.     Separation of duties

g.    Sound personnel practices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Video Store maintains the following policies with regard to purchases of new DVDs at each of its branch stores:

1.    Once each month a person from the home office visits each branch store to examine the receiving records and to compare the inventory of DVDs with the accounting records.

2.    Employees are required to take vacations, and the duties of employees are rotated periodically.

3.    Purchases of new DVDs must be authorized by purchase order in the home office and paid for by the treasurer in the home office. Receiving reports are prepared in each branch and sent to the home office.

4.    All new personnel receive one hour of training in how to receive and catalogue new DVDs.

5.    The company maintains a perpetual inventory system that keeps track of all DVDs purchased, sold, and on hand.

Match the control procedures to each of the policies listed. (Hint: Some may have more than one answer.)