Asked by Jamie Walker on Jun 27, 2024
Verified
All of the following are examples of a control activity except
A) using prenumbered documents.
B) reconciling the bank statement.
C) insistence that employees work overtime.
D) prenumbering cheques.
Control Activity
A policy or procedure that is part of the internal control framework designed to address specific risks and help ensure the achievement of an organization's objectives.
Prenumbered Documents
Documents that are sequentially numbered in advance to ensure completeness and to prevent fraud or misuse.
- Recognize the essential purpose and contributions of internal controls to a corporation's financial procedures.
- Understand the importance of prenumbering documents and its effect on monitoring financial transactions.
Verified Answer
NZ
nathan zubakJun 30, 2024
Final Answer :
C
Explanation :
Control activities in accounting and auditing are designed to ensure that all transactions are authorized and recorded correctly to prevent fraud and errors. Examples include using prenumbered documents (A) and prenumbering cheques (D) to track transactions systematically, and reconciling the bank statement (B) to compare the company's records with the bank's records for accuracy. Insistence that employees work overtime (C) is not a control activity; it relates to management practices and labor management rather than the internal control system designed to ensure accurate and reliable financial reporting.
Learning Objectives
- Recognize the essential purpose and contributions of internal controls to a corporation's financial procedures.
- Understand the importance of prenumbering documents and its effect on monitoring financial transactions.