Internal Controls
the A

question 27

Essay

Internal controls
The A. Gary Anderson Graduate School of Management (AGSM) at the University of California, Riverside periodically needs to hire part-time faculty for certain accounting and information systems courses. The department chair of Accounting and Information Systems identifies the courses each term, and sends an e-mail to professors at other local universities. Candidates respond to the e-mail, indicating which course(s) they are qualified and available to teach. AGSM department faculty evaluates each candidate and decides which candidates will teach which courses. At that point, AGSM's clerical staff requests the following information: resume, degree transcripts and student evaluations for the last year. Once those items are received, AGSM sends each part-time faculty member a hiring packet; the faculty member fills out the hiring packet, which includes various personnel, tax and payroll forms, and brings the completed packet to AGSM. The newly-hired faculty member is assigned an office and teaches the class as scheduled. AGSM staff process payroll once a month; faculty can have their salary deposited electronically in the bank or pick up a paper check on the first of the month.
Identify five risks for AGSM based on the preceding scenario. Suggest an internal control to address each risk, and indicate whether the internal control is primarily preventive, detective or corrective. Use the table below to record your responses.
$$\begin{array} { | l | l | l | } \hline \text { Risk } & \text { Control } & \text { Control type } \\\hline & & \\\hline & & \\\hline & & \\\hline & & \\\hline & & \\\hline\end{array}$$

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Definitions:

Conditioning Principles

Fundamental concepts in psychology that explain how organisms learn from the association between stimuli and responses, pivotal in classical and operant conditioning.

Instinctive Drift

The tendency of an animal to revert to instinctive behaviors that interfere with a conditioned response.

Innate Response

A built-in reaction to stimuli that an organism is genetically programmed to exhibit, also known as an instinct.

Conditioning Process

The method by which organisms learn to associate different stimuli and behaviors through reinforcement or punishment.