The types of risk indicated by this situation are systems risk, and legal and regulatory risks. C) I would recommend background checks on employees, segregation of duties, and physical security. 6) A. Conducting surprise cash counts- safeguarding assets B. Creating a policy manual-encouraging compliance C. Creating separate departments for purchasing inventory a d receiving inventory- promoting operational efficiency D. Deleting and employee’s computer account when the employee retires or is fired-safeguarding assets E. Employing internal auditors- safeguarding assets F.
Installing virus cleaning software on all computers- safeguarding assets G. Locking filing cabinets with sensitive documents- safeguarding assets H. Performing background checks on employees- safeguarding assets l. Reconciling the bank statements monthly-ensuring financial statement reliability J. Requiring all management employees to take annual vacations-promoting operational efficiency. 1) The computer center was located on the first floor of a building that had two Tories- this could pose several risks to the computers. Foremost being flooding.
This also allows for easier access for anyone trying to physically break into the system. I would suggest moving the center to the second story. 2) MIM only periodically backs up its data and programs- I would suggest that all information is backed up daily. A. Richard faces credit risks, and human error. B. If I were a cashier I could possibly Just not enter a cash transaction, pocket the cash, and when the opportunity arises, remove and destroy the hand written invoice en check point, the transactions have an automatic numbering system, and there are several reviews for all the transactions.
These are all meant to protect against human error, fraud and theft. D. They could improve internal controls by removing anything hand written and making all transaction parts through a computerized process. 13) 10)E a. Always true b. Always true c. Sometimes true- if only one person Is signing checks, that one person is the one to be held responsible if the checks are off. D. Always true e. Never true f.
Sometimes true-internal controls can help prevent fraud but cannot guarantee 100% that there will be no fraud. G. Sometimes true-this can sometimes can be the case especially if this is how the business is always run. H. Sometimes true-depending on the extent gone to it can be more expensive but in most cases if you prevent the problem before it happens it can save a lot of money over time. I. Never true j. Sometimes true- weaknesses can cause a drop in stock prices if nothing is done to correct them.