Guard dog company – identify the internal control Essay Example

irregularities. (b) Assigning the head usher to serve for three months only creates detachment of accountability from the board of trustees, who are ultimately responsible for managing church finances.

3. Allowing the financial secretary to access the safe and conduct a recount of collection without another person present presents an opportunity for fraud since they have access to records that can be altered. 4. Permitting the secretary to retain $150 to $200 of collected cash for weekly expenditures and depositing the remainder in the bank violates the imprest fund system principle (Newman, 1964; United Nations Publications, 2006). The system requires that all disbursements be made via check, not from unbanked cash collections. 5.

The act of instructing church members to make their contribution checks payable to "Cash" should be discouraged. In preparation for the upcoming audit team meeting, improvements in internal control procedures will be discussed for several positions including: (1) ushers, (2) head usher, (3) financial secretary, and (4) finance committee. Specifically, the proposed enhancements include requiring the ushers to count their collections while the head usher is present, ensuring that the head usher is appointed by the board of trustees rather than a volunteer, and restricting the financial secretary's access to records rather than custody of funds.

The finance committee's responsibility for auditing the financial records may conflict with its financial management function. Therefore, an independent audit committee should be created by the board of trustees to handle the audit function. Additionally, the church should adopt the imprest fund system to improve internal control. Under this system, all cash collections for the day should be deposited daily at the bank, and no disbursement should be taken

from these collections. All disbursements should be made by check, and a responsible custodian should handle petty cash expenses with issued checks.

It is recommended that the church establish an autonomous audit committee to consistently review the church records and finances, while also acquiring fidelity insurance for those who have custodial duties. This paper has shown how implementing the five fundamental principles of cash management can enhance business precision. Precise reporting is vital for responsible decision-making in business practices, and these principles can be applied to individual cases as well.

The following sources are cited: Newman's (1964) publication on Auditing, J. Wiley's United Nations Publications (2006) of the Financial Report and Audited Financial Statements for the Biennium Ended 31.