Internal Controls
Faith Cassen has recently been hired as the manager of Gibraltar Coffee Shop. Gibraltar Coffee Shop is a national chain of franchised coffee shops. During her first month as store manager, Faith encountered the following internal control situations:
a.Faith caught an employee putting a case of 1,000 single-serving tea bags in his car. Not wanting to create a scene, Faith smiled and said, "I don’t think you’re putting those tea bags on the right shelf. Don't they belong inside the coffee shop?" The employee returned the tea bags to the stockroom.
I with Faith's method of handling this situation because she has the internal control principle of safeguarding of assets.
b.Gibraltar Coffee Shop has one cash register. Prior to Faith’s joining the coffee shop, each employee working on a shift would take a customer order, accept payment, and then prepare the order. Faith made one employee on each shift responsible for taking orders and accepting the customer’s payment. Other employees prepare the orders.
I with Faith's method of handling this situation because Faith has the internal control principle of assignment of responsibility and the internal control principle of segregation of duties.
c.Because only one employee uses the cash register, that employee is responsible for counting the cash at the end of the shift and verifying that the cash in the drawer matches the amount of cash sales recorded by the cash register. Faith expects each cashier to balance the drawer to the pennyevery time—no exceptions.
I with Faith's method of handling this situation because Faith has the internal control principle of segregation of duties.