1. Internal Control Cases
1) Solution to Holly Company Payroll System
Part a) Payroll DFD
Part b) Payroll System Flowchart
Chapter 1 Page 2
Part C. Uncontrolled Risks:
2) Accounting Department approves, prepares, and signs paychecks, which
3) Accounting errors and fraudulent transaction may go undetected when the
4) Payroll drawn on general cash account rather than a clearing account. This
5) Payroll clerk prepares paychecks without authorization from a personnel
Chapter 1 Page 3
6) Foremen authorize time cards and distribute paychecks. This permits the
Part d)
Physical Controls
IT Controls
Chapter 1 Page 4
2. TIGHT LINES FISHING AND CAMPING SUPPLIES (NETWORKED
COMPUTER SYSTEM AND MANUAL PROCEDURES)
a, b, see following pages.
c, Uncontrolled Risks
Fixed Assets
Payroll
d. Physical Controls
Fixed Assets
Payroll
Chapter 1 Page 5
IT Controls
Chapter 1 Page 6
Chapter 1 Page 7
Chapter 1 Page 8
Chapter 1 Page 9
Chapter 1 Page 10