Handling Internal Control Situations at Gibraltar Coffee Shop
2. Do you agree with Faith's method of handling the cash register responsibilities at Gibraltar Coffee Shop?
3. What internal control principles did Faith follow or neglect in each situation? 1. Faith caught an employee putting tea bags in his car and asked him to return them to the stockroom.
2. Faith made one employee responsible for the cash register balancing and expected no mistakes.
3. Faith followed or neglected internal control principles such as safeguarding of assets, assignment of responsibility, and segregation of duties.
Handling Tea Bag Situation
1. Safeguarding of Assets: Faith's handling of the tea bag incident may not have fully adhered to the internal control principle of safeguarding assets. While she avoided creating a scene, addressing the employee's behavior directly and ensuring proper discipline could have better enforced the safeguarding of assets.
Cash Register Responsibilities
2. Assignment of Responsibility and Segregation of Duties: Faith's decision to assign one employee to handle cash register responsibilities aligns with the internal control principles of assignment of responsibility and segregation of duties. By clearly defining roles, she reduces the risk of errors or misconduct.
Internal Control Principles
3. Assessment of Internal Control Principles: Faith's actions reflect a mix of following and neglecting internal control principles. While she demonstrated awareness of assigning responsibilities, there may be room for improvement in fully adhering to principles such as safeguarding assets and segregation of duties in certain situations.