西方财务会计课后题58答案.docx
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西方财务会计课后题58答案
CHAPTER5
1.Theknowledgethatjobrotationispracticedandthatoneemployeemayperformanother’sjobatalaterdatetendstodiscouragedeviationsfromprescribedprocedures.Also,rotationhelpstodiscloseanyirregu
laritiesthatmayoccur.
2.Authorizingcompletecontroloverasequenceofrelatedoperationsbyoneindividualpresentsopportunitiesforinefficiency,errors,andfraud.Thecontroloverasequenceofoperationsshouldbedividedsothattheworkofeachemployeeisautomaticallycheckedbyanotheremployeeinthenormalcourseofwork.Asystemfunctioninginthismannerhelpspreventerrorsandinefficiency.Fraudisunlikelywithoutcollusionbetweentwoormoreemployees.
3.Toreducethepossibilityoferrorsandembezzlement,thefunctionsofoperationsandaccountingshouldbeseparated.Thus,oneemployeeshouldnotberesponsibleforhandlingcashreceipts(operations)andmaintainingtheaccountsreceivablerecords(accounting).
4.No.Combiningtheresponsibilityforrelatedoperations,suchascombiningthefunctionsofpurchasing,receiving,andstoringofsupplies,increasesthepossibilityoferrorsandfraud.
5.Thecontrolprocedurerequiringthatresponsibilityforasequenceofrelatedoperationsbedividedamongdifferentpersonsisviolatedinthissituation.Thisweaknessintheinternalcontrolmaypermitirregularities.Forexample,theticketseller,whileactingastickettaker,couldadmitfriendswithoutaticket.
6.Theresponsibilityformaintainingtheaccountingrecordsshouldbeseparatedfromtheresponsibilityforoperationssothattheaccountingrecordscanserveasanindependentcheckonoperations.
7.Theindividualaccountsreceivableledgeraccountsprovidebusinessmanagersinformationonthestatusofindividualcustomeraccounts,whichisnecessaryformanagingcollections.Managersneedtoknowwhichcustomersowemoney,howmuchtheyowe,andhowlongtheamountowedhasbeenoutstanding.
8.Themajoradvantagesoftheuseofspecialjournalsaresubstantialsavingsinrecord-keepingexpensesandareductionofrecord-keepingerrors.
9.a.250;b.None
10.a.250;b.1
11.a.Sometimefollowingtheendofthecurrentmonth,oneoftwothingsmayhappen:
(1)anoverduenoticewillbereceivedfromHoffmanCo.,and/or
(2)aletterwillbereceivedfromHofferCo.,informingthebuyeroftheoverpayment.(Itisalsopossiblethattheerrorwillbediscoveredatthetimeofmakingpaymentiftheoriginalinvoiceisinspectedatthetimethecheckisbeingwritten.)
b.Thescheduleofaccountspayablewouldnotagreewiththebalanceoftheaccountspayableaccount.Theerrormightalsobediscoveredatthetimetheinvoiceispaid.
c.Thecreditorwillcalltheattentionofthedebtortotheunpaidbalanceof$1,000.
d.Theerrorwillbecomeevidentduringtheverificationprocessattheendofthemonth.Thetotaldebitsinthepurchasesjournalwillbelessthanthetotalcreditsby$2,000.
12.a.No,theerrorwillnotcausethetrialbalancetotalstobeunequal.
b.No,thesumofthebalancesinthecreditorsledgerwillnotagreewiththebalanceoftheaccountspayableaccountinthegeneralledger.
13.a.Cashpaymentsjournal;b.Purchasesjournal;c.Cashpaymentsjournal
d.Purchasesjournal;e.Cashpaymentsjournal
14.Anelectronicformisasoftwarewindowthatprovidestheinputsforaparticulartransaction.Forexample,acheckformprovidestheinputs(payee,amount,date)foracashpaymenttransaction.Anelectronicinvoiceprovidestheinputs(customer,amountsold,itemsold)forrecordingrevenuesearnedonaccount.
15.Theuseofcontrollingaccountstoverifytheaccuracyofsubsidiaryaccountsisusedinamanualsystem.Inacomputerizedsystem,itisassumedthatthecomputerwillaccuratelysumtheindividualtransactionsinthesubsidiaryaccountsindeterminingtheaggregatebalance.Thus,thereisnoneedforcontrollingaccountsforcontrollingtheaccuracyoftheindividualpostings.
16.Forautomatedsystemsthatuseelectronicformsthespecialjournalsarenotusedtorecordoriginaltransactions.Rather,elec-tronicformscapturetheoriginaltransactiondetailfromaninvoice,forexample,andautomaticallypostthetransactiondetailstotheappropriateledgeraccounts.
17.E-commercecanbeusedbyabusinesstoconducttransactionsdirectlywithcustomers.Thus,anordercanbereceiveddirectlyfromthecustomer’sInternetinputandcashcanbereceivedfromthecreditcard.Manytimes,thecashisreceivedpriortoactuallyshippingtheproduct,resultinginafasterrevenue/collectioncycle.Reducingpaperworkthroughoutthecyclealsoimprovestheefficiencyoftheprocess.Forexample,alloftheaccountingtransactionscanbefedautomaticallyfromtheinitialWeb-basedinputs.
Ex.5–1
Asaninternalauditor,youwouldprobablydisagreewiththechangeinpolicy.FirstCharterhassomenormalbusinessriskassociatedwithdefaultonbankloans.Onewaytohelpminimizethisistocarefullyevaluateloanapplications.Largeloanspresentgreaterriskintheeventofdefaultthandosmallerloans.Thus,itisreasonabletohavemorethanonepersoninvolvedinmakingthedecisiontograntalargeloan.Inaddition,loansshouldbegrantedontheirmerits,notonthebasisoffavoritismormereassociationwiththebankpresident.Allowingthebankpresidenttohavesoleauthoritytograntlargeloanscanleadtothepresidentgrantingloanstofriendsandbusinessassociates,withouttherequiredduediligence.Thiscanresultinabankbecomingexposedtoverypoorcreditrisks.Indeed,thisscenarioisoneofthecausesofsavingsandloanandbankfailuresofthepast.
Ex.5–2
Thisisanexampleofafraudwithsignificantcollusion.Fraudsthatareperpetratedwithmultiplepartiesindifferentpositionsofcontrolmakedetectingfraudmoredifficult.Inthiscase,thefraudbeganwithanemployeeresponsibleforauthorizingclaimpayments.Thisisasensitivepositionbecausehisdecisionswouldinitiatepayments.However,claimswouldneedtobeauthorizedandverifiedbeforepaymentwouldbemade.Knowingthis,theemployeemadesureeachclaimhadaphony“victim.”Thus,therewasaverifiablestorybehindeachclaim.Onlybytrackingphysicalevidenceoftheaccidentcoulditbediscoveredthattheclaimwasfictitious.However,theverynatureoftheprocesswastoresolvesmallclaimsquicklywithoutexcessivecontrol.Lastly,corruptlawyerswerebroughtintothefraudtoactasattorneysfortheclaimants.Thisgavetheclaimsevenmorecredibility.Inactuality,thelawyershaddonelegitimatebusinesswiththetruckingcompany,soallappearednormal.Thisfraudwasdiscoveredwhenthefraudulentemployee’sbanknoticedirregularitiesinhisbankaccountandnotifiedauthorities.Asthesayinggoes,“Followthemoney!
”Asasidenote,thecorruptclaimsadministratorfellintothisbehaviorduetogamblingproblems.
Ex.5–3
EventSoundshouldnothavereliedontheunusualnatureofthevendorsanddeliveryfrequencytouncoverthisfraud.Thepurchaseandpaymentcycleisoneofthemostcriticalbusinesscyclestocontrol,becausethepotentialforabuseissogreat.Purchasesshouldbeinitiatedbyarequisitiondocument.Thisdocumentshouldbecountersignedbyasuperiorsothattwopeopleagreeastowhatisbeingpurchased.Therequisitionshouldinitiateapurchaseordertoavendorforgoodsorservices.Thevendorrespondstothepurchaseorderbydeliveringthegoods.Thegoodsshouldbeformallyreceivedusingareceivingdocument.Anaccountspayableclerkmatchestherequisition,purchaseorder,andinvoicebeforeanypaymentismade.Such“triplematching”preventsunauthorizedrequestsandpayments.Inthiscase,therequestswereunauthorized,suggestingthattheemployeehadsoleauthoritytomakearequest.Second,thisemployeehadaccesstotheinvoices.Thisaccessallowedtheemployeetochangecriticalcharacteristicsoftheinvoicetohidethetruenatureofthegoodsbeingreceived.Theinvoiceshouldhavebeendelivereddirectlytotheaccountspayableclerktoavoidcorruptingthedocument.Thereapparentlywasnoreceivingdocument(commonforsmallercompanies);thus,onlytheinvoiceprovidedproofofwhatwasreceivedandtobepaid.Iftherehadbeenareceivingreport,theinvoicecouldnothavebeendoctoredandgoneundetected,becauseitwouldnothavematchedthereceivingreport.
NotetoInstructors:
Thisexerciseisbasedonanactualfraud.
Ex.5–4
a.Themostdifficultfraudstodetectarethosethatinvolvetheseniormanagementofacompanythatisinaconspiracytocommitthefraud.Theseniormanagershavethepowertoaccessmanypartsoftheaccountingsystem,whilethenormalseparationofdutiesissubvertedbyinvolvingmanypeopleinthefraud.Inaddition,theauthorizationcontrolissubvertedbecausemostoftheauthorizationpowerresidesintheseniormanagement.
b.Overall,thistypeoffraudcanbestoppedifthereisstrongoversightofseniormanagement,suchasanauditcommitteeoftheboardofdirectors.Individual“whistleblowers”inthecompanycanmaketheirconcernsknowntotheindependentorinternalauditorswho,inturn,caninformtheauditcommittee.Theauditcommitteeshouldbeindependentofmanagementandhavethepowertomonitortheactionsofmanagement.
Ex.5–5
1.Generalledgeraccounts:
(e);2.Subsidiaryledgeraccounts:
(a),(b),(c),(d)
Ex.5–6
a.Cashreceiptsjournal;b.Cashreceiptsjournal;c.Generaljournal(notarevenuetransaction)
d.Generaljournal;e.Cashreceiptsjournal;f.Cashreceiptsjournal
g.Cashreceiptsjournal;h.Revenuejournal;i.Cashreceiptsjournal;j.Generaljournal
Ex.5–7
a.Cashpaymentsjournal;b.P