ACT 3112-2112- Tutorial Questions/MAT/ Sem 1-2019

ACT 2112-3112- INTRODUCTION TO ACCOUNTING

Semester 1-2019

Tutorial Topic 3 –Accounting Systems and Control

1. Among the factors that will influence the accounting system is the business activities and the
business forms of the entity. Do you agree or disagree? Briefly explain.
2. When should an accounting system be developed in a business entity?
3. State at least five elements of a sound internal control system.
4. The ticket seller at a movie theater doubles as a ticket taker for a few minutes each day while
the ticket taker is on a break. Which control procedure of a business’s system of internal
control is violated in this situation?

5. Assume that Julie, accounts payable clerk for ABC Bhd., stole RM110,000 by paying fictitious
invoices for goods that were never received. The clerks set up accounts in the names of the
fictitious companies and cash the checks at a local bank. Describe a control procedure that
would have prevented or detected the fraud.

6. Electro Co. discovered a fraud whereby one of its front office administrative employees used
company funds to purchase goods, such as computers, digital cameras, compact disc players,
and electronic items for her own use. The fraud was discovered when employees noticed an
increase in delivery frequency from vendors and the use of unusual vendors. After some
investigation, it was discovered that the employee would alter the description or change the
quantity on an invoice in order to explain the cost on the bill. What general internal control
weaknesses contributed to this fraud?
7. The procedures used for over-the-counter receipts are as follows. At the close of each day’s
business, the sales clerks count the cash in their respective cash drawers, after which they
determine the amount recorded by the cash register and prepare the memo cash form, noting
any discrepancies. An employee from the cashier’s office counts the cash, compare the total
with the memo, and takes the cash to the cashier’s office.

a. Indicate the weak link internal control.

b. How can the weakness be corrected?