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Church Weakness Or Control
Griffin Company Weakness or Control
Key Terms
Fraud or Negligence
100
The head usher counts the offerings in the church office without any supervision
What is a weakness. The control: having others present at the time
100
All financial and accounting matters were entrusted to one employee.
What is a weakness. The control: Have a separation of duties in the business.
100
A process, effected by the entity's board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the categories of (1) operations, (2) reporting, and (3) compliance.
What is INTERNAL CONTROL.
100
the usher removes cash from envelopes and throws pre numbered envelops away because thats what he was trained to do.
What is NEGLIGENCE. Fraud: The usher pockets cash and throws envelops away to hide evidence of contribution.
200
An audit committee is appointed to perform periodic audits for the church.
What is a control The weakness: The church has not had an internal or external audit for the past several years
200
Willian Barton reviews Griffin Equipment Co. financial statements monthly.
What is a control. The weakness: Barton is relying on Hopkins to give him monthly financial information without cross referencing it.
200
is the concept of having more than one person required to complete a task. In business the separation by sharing of more than one individual in one single task is an internal control intended to prevent fraud and error.
What is SEPARATION OF DUTIES.
200
Secretary uses pledge to issue contribution letter to members.
What is NEGLIGENCE.
300
The same employee is in charge of the records and serves as the financial secretary.
What is a weakness The control: Separate the duties of the employee in order to have accountability
300
Barton hires two CPAs to assist Hopkins.
What is a control. The weakness: He has two incompetent employees who were trained by Hopkins.
300
controls that deter control problems before they occur.
What is PREVENTATIVE CONTROLS.
300
Hopkins knowingly records a note for $4,000 instead of the $24,000.
What is FRAUD. Negligence: Hopkins transposes his numbers and records a note on the books of $42,000 instead of $24,000.
400
Members are asked to make checks payable to the church and submitted in their pre numbered envelopes which are kept track of in a ledger.
What is a control. The weakness: Checks were made to cash and the envelopes were not kept the contributions were not recorded.
400
Barton reconciles his A/P and bank accounts every month.
What is control. The weakness: He does not do that.
400
Intentional misstatement of financial statement by management, or theft of assets by employees, also referred to irregularities.
What is FRAUD.
400
Hopkins decided to give himself a $20,00) bonus for his hard work.
What is FRAUD
500
Members are self reporting there contributions to the church.
What is a weakness The control: All contributions should be submitted in pre numbered envelopes and recorded into their account. A contribution report is sent out at the end of year.
500
Griffin Equipment Co. rely on 1 signer.
What is a weakness. The Control: Having a second signer who does not control the check.
500
the division of authority, responsibility, and duties among members of an organization.
What is ORGANIZATIONAL STRUCTURE.
500
The financial secretary at the church keeps unrecorded cash in a separate drawer.
What is NEGLIGENCE.