Small Company (SC)is in Its Fourth Year of Retail Operations

question 7

Essay

Small Company (SC)is in its fourth year of retail operations. The owner/manager previously employed a part-time bookkeeper to sign cheques, as well as to prepare journal entries, bank reconciliations, and monthly financial statements. SC has just hired you as the first full-time accountant to replace the bookkeeper, and you are preparing the December 31, 2021 financial statements.
Required:
a. Briefly explain the concept of "segregation of duties."
b. Identify an internal control issue relating to SC's cash-handling procedures, and provide your recommendation(s)to improve SC's internal controls over cash.

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Definitions:

Abbreviation

An abridged version of a word or phrase.

Folvite

A pharmaceutical form of folic acid, used to treat or prevent low blood levels of folate.

Folic Acid Deficiency

A condition caused by inadequate levels of folic acid in the body, leading to various health issues including anemia.

Iron-Deficiency Anemia

A condition resulting from insufficient iron levels, leading to a decrease in the number of healthy red blood cells, causing fatigue and weakness.