At Radiant Company, the sales department is also responsible for recording cash transactions as it does not have a separate accounting department. Which internal control procedure needs strengthening?

Question

Social Studies

Kyra

1 February, 02:02

At Radiant Company, the sales department is also responsible for recording cash transactions as it does not have a separate accounting department. Which internal control procedure needs strengthening?

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Answers (1)

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Kathryn Bauer · Answer 1

separation of duties

Explanation:

Here, the case provided of the Radiant company is a simple case of separation of duties as it can strengthen internal control significantly. This separation of duties procedure will ensure that two different departments or at least two different people are responsible for sales and for recording cash transactions. This will reduce the chance of error as the person who made the sale might be careless or overworked in recording cash transaction and can also commit fraud as they are the one who knows the sales amount and can alter the sales details and documents. Hence by separation of duties, internal control will be strengthened.