Mary Jane Mendez

Solution:

A. First, checks may be stolen by one or more people during data processing. Second, mistakes in
recording may occur during check processing, such as the incorrect amount being entered, the
wrong client being credited, and the wrong discount being taken. Last but not least, the cashier
may misappropriate the check.
B. The checks should not be sent to the data processing department. Rather, after being endorsed
for deposit only, the checks should be sent immediately to the cashier, and a copy of the
prelisting, together with any associated remittance advices, should be forwarded to data
processing for recording. Controls that should be in place: Someone who does not have access
to the checks should verify the total of the prelisting of cash receipts with the receipted deposit
ticket acquired from the bank, as well as the debit to cash created by computer processing of
the receipts and transactions. Computer editing controls should ensure that the customer
number is valid and that monetary discounts are applied correctly. The computer should check a
control total for cash receipts with the total of cash receipts processed to ensure that the cash
receipts entered into the computer are correct.
C. Any missing checks should be detected by comparing the prelisting of cash receipts with the
deposit ticket and removing exceptions to account statements.
D. Compare an example of daily cash prelisting’s to ledger accounts debit to cash and receipted
deposit tickets. Choose a sample of customer report copies and go through customer
communication files to look for exceptions and how they were handled. Reprocess or witness
the reprocessing of client remittances to assess the efficacy of computer editing controls, pay
special attention to mistakes in inputting customer account numbers and inappropriate
discounts.