MGT120H5 Chapter 4: Internal Control Procedures
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MGT120H5 Full Course Notes
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Document Summary
In business with good internal controls, no important duty is overlooked. Each person in the info chain is important. Background checks should be conducted on job applicants. Proper training and supervision, also competitive salaries, helps ensure that all employees are sufficiently competent for their jobs. Employee responsibilities should be clearly laid out in position descriptions. With clearly assigned responsibilities, all important jobs get done. In processing transactions, smart management separates 3 key duties: The accounting department should be completely separate from the operating departments, such as production and sales. No employee should have responsibility for both handling cash and recording cash transactions in the accounting records. If one employee has both cash-handling and accounting duties, that person can steal cash and conceal the theft. All internal controls must be regularly monitored to ensure they are operating effectively and efficiently. When flaws discovered --> promptly correct them.
