Segregation of Duties Questions

Internal Control Case Study

Harper Theater is located in Midtown Mall. The cashier’s booth is near the entrance to the theater. Two cashiers are employed. Once works from 1-5 pm, the other from 5-9 pm. Each cashier is bonded. The cashiers receive cash from customers and operate a machine that ejects serially numbered tickets. The rolls of tickets are inserted and locked into the machine by the theater manager at the beginning of each cashier’s shift.

After purchasing a ticket, the customer takes the ticket to an usher stationed at the entrance to the theater lobby some 60 feet from the cashier’s booth. The usher tears the ticket in half, admits the customer, and returns the ticket stub to the customer. The other half of the ticket is dropped into a locked box by the usher.

At the end of each cashier’s shift, the theater manager removes the ticket roll from the machine and makes a cash count. The cash count sheet is initialed by the cashier. At the end of the day, the manager deposits the receipts in total in a bank night deposit vault located in the mall. The manager also sends copies of the deposit slip and the initialed cash count sheets to the theater company treasurer for verification and to the company’s accounting department. Receipts from the first shift are stored in a safe located in the manager’s office.

Required: using Microsoft Word, answer the following questions and attach the document to this assignment:

1. Identify the internal control procedures and their application to the cash receipts transactions of the Harper Theater. You will find the Internal Control Procedures on pages 542 through 544 of your textbook. The Internal Control procedures are establishment of clear responsibilities, proper documentation, adequate insurance, separation of assets from custody, separation of duties, and use of technology. For each Internal Control Procedure, identify any Internal Control Procedures that Harper Theater has in place and/or is missing. Be specific and use at least 300 words for your answer.
2. If the usher and cashier decide to collaborate to misappropriate cash, what actions might they take? For each action, what internal control might be employed to stop the misappropriation of cash? Be specific and use at least 200 words for your answer.
3. Use complete sentences and good grammar.

Rubric

Internal Control Case Study

Internal Control Case Study

Criteria	Ratings	Pts
This criterion is linked to a Learning OutcomeIdentify Internal Control Procedures in place or missingFor each Internal Control Procedure identified on pages 433 and 434 in your textbook, identify any Internal Control Procedures that Harper Theater has in place and/or is missing. Be specific and use at least 300 words for your answer.	15 ptsFull Marks 0 ptsNo Marks	15 pts
This criterion is linked to a Learning OutcomePossible actions taken to misappropriate cashIf the usher and cashier decide to collaborate to misappropriate cash, what actions might they take? For each action, what internal control might be employed to stop the misappropriation of cash? Be specific and use at least 200 words for your answer.	10 ptsFull Marks 0 ptsNo Marks	10 pts
This criterion is linked to a Learning OutcomeWell writtenUses complete sentences and good grammar.