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Control procedures built into information system and the management environment are the means by which access is gained by businesses to the five objects of internal controls discussed. Examples include appropriate separation of duties, other and comparison checks, decent records, appropriate approvals, and physical safeguards to shield assets from theft. AMEX Products consistently reviews its framework of internal controls, including the companys policies, processes and organizational structure. Advancements are implemented as appropriate whether the company is a Starbucks store, Microsoft, or AMEX Products, and corrective actions are taken to address any management deficiencies, every important class of transactions needs to have the following internal control processes. In a company with great internal controls, no obligation that was significant is overlooked. Each person in the information chain is not unimportant. The chain should start with hiring. Background checks should be conducted on job applicants. Paying competitive salaries and supervision, as well as proper training, helps ensure that all employees are sufficiently qualified due to their jobs.

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Employee duties should be clearly laid out in position descriptions. By way of example, the treasurers section should be in charge of cash handling, in addition to signing and approving checks. Warehouse personnel should be in charge of storing and keeping track of stock. With clearly designated duties, all significant jobs get done. In processing trades, smart direction separates trade acceptance: asset handling, record keeping, and three key obligations. For example, in the event of AMEX Products, separation of the obligations of cash handling from record keeping for customer accounts receivable would have removed Melissa Costs incentive to engage in fraud, because it would have caused it to be impossible for her to have lapped accounts receivable if another employee were maintaining the books. Ideally, someone else should also review customer accounts for collectability and be in charge of writing them away if they become wholly uncollectible.

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The bookkeeping department should be entirely different from the managing sections, including production and sales. What buy microsoft office 2010 would occur if sales employees, who were compensated based on a percent of the sum approved the companys sales trades to customers? Sales amounts could be inflated and might not represent the ultimate sum collected from customers. At any cost, cash must not be handled by accountants, and cash handlers must not have use of the bookkeeping records. If one worker has both cash- bookkeeping responsibilities and management, that man hide the theft and can steal cash. That is what happened at AMEX Products. For businesses which are not too large to hire men that are different to do all of these functions, the internal control that is key to great is getting the owner involved, usually reconciling the monthly bank account, making bank deposits, or by approving all trades that are big. Classof1 offers Financial Accounting Assignment Help