The owner of Zeke's Landscaping Designs just hired an office manager to handle all the office functions for him. Among other responsibilities, the office manager will handle key accounting functions such as processing customer payments, writing cheques to employees to pay the payroll, handle daily bank deposits at the bank, pay suppliers, and reconcile the company bank account bank reconciliations. What internal cash control practice is being overlooked by the owner?

Question

Quizplus · Accepted Answer

The separation of cash payment from cash disbursement function is being overlooked. This means that the same person who receives cash payments from customers is also responsible for making payments to suppliers and employees, increasing the risk of theft or errors. Separating cash payment receipt function from cash disbursement will add an extra layer of internal control, reducing the risk of fraud and errors. The other options (daily cash deposits, bank reconciliations, payment by cheque, and external audit) are important internal cash control practices that are already being implemented by the owner.

The Owner of Zeke's Landscaping Designs Just Hired an Office