For Each of the Following Situations,indicate Which Internal Control Procedure

question 64

Essay

For each of the following situations,indicate which internal control procedure Johnson Company has violated:
1.Since they are costly,background checks are not done for the employees.
2.Purchases of items on credit do not need the approval of the purchasing department.
3.All hard copies of documents are shredded after one month and electronic records are deleted after two months.
4.The company does not prepare operating or cash budgets.
5.The accountant receives the checks from customers in payment of amounts due and records the cash receipts.
6.There are no locks in the area where inventory is stored.
7.The hiring,firing and pay adjustments are made by the foremen in the manufacturing area.

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Definitions:

Strategic Compensation

The design and implementation of compensation systems to align employee rewards with the organization's strategic objectives.

Business Objectives

Goals and targets that a business aims to achieve in a set period.

Compensation Systems

Structured plans implemented by businesses to reward and provide financial benefits to employees for their work and performance.

Broadbanding

A method of salary structure that consolidates a large number of pay grades into fewer broad bands to provide greater flexibility in employee movement and compensation.