question archive Catt Company has the following internal control procedures over cash disbursements
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Catt Company has the following internal control procedures over cash disbursements.
Identify the internal control principle that is applicable to each procedure.
(a) | Company checks are prenumbered. | Establishment of responsibilityPhysical controlsSegregation of dutiesHuman resource controlsIndependent internal verificationDocumentation procedures | ||
(b) | The bank statement is reconciled monthly by an internal auditor. | Segregation of dutiesDocumentation proceduresIndependent internal verificationEstablishment of responsibilityPhysical controlsHuman resource controls | ||
(c) | Blank checks are stored in a safe in the treasurer?s office. | Physical controlsDocumentation proceduresHuman resource controlsIndependent internal verificationEstablishment of responsibilitySegregation of duties | ||
(d) | Only the treasurer or assistant treasurer may sign checks. | Segregation of dutiesDocumentation proceduresPhysical controlsEstablishment of responsibilityHuman resource controlsIndependent internal verification | ||
(e) | Check-signers are not allowed to record cash disbursement transactions. | Human resource controlsPhysical controlsDocumentation proceduresEstablishment of responsibilityIndependent internal verificationSegregation of duties |
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