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Case Study: Governance

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Hannah Rose Navaja
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13 views1 page

Case Study: Governance

Uploaded by

Hannah Rose Navaja
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Hannah Rose S.

Navaja BSMA-2 ACCTG 401(3049) 02/05/25

Case Study: SBOA Reports

Case Study 1: What steps can you take to provide reasonable assurance that all banking transactions are for lawful purposes?
Five components of internal control

1.​Control Environment – Establishes a culture of integrity and accountability within the organization. Ensure management
actively enforces policies against fraudulent transactions.
2.​Risk Assessment – Identify risks such as unauthorized withdrawals, check fraud, or money laundering. Conduct periodic
reviews of all banking activities for anomalies.
3.​Control Activities – Implement dual authorization for large transactions. Require supporting documentation for deposits
and withdrawals. Restrict blank money orders to authorized personnel.
4.​Information and Communication – Maintain transparent reporting channels for employees to report suspicious
transactions. Regularly communicate banking policies and procedures to employees.
5.​Monitoring Activities – Conduct regular audits of banking transactions. Use automated monitoring tools to flag unusual
transactions.

Case Study 2: What Internal Controls are necessary to detect or prevent these types of payroll transactions?
(Focusing on overpayments, duplicate payments, extra payments, and payments to non-employees)

1. Control Environment – Ensure payroll policies clearly define authorized payments and responsibilities. Assign accountability
to payroll managers and finance officers.
2. Risk Assessment – Identify risks related to unauthorized payroll modifications and ghost employees. Assess the impact of
payroll errors on financial stability.
3. Control Activities – Implement segregation of duties (separate payroll entry, approval, and payment processing). Require
management approval for additional payroll disbursements. Use automated payroll systems to detect duplicate or unauthorized
payments.
4. Information and Communication – Maintain detailed payroll records and provide periodic reports to management. Establish a
reporting system for employees to report payroll discrepancies.
5. Monitoring Activities – Conduct payroll reconciliations to compare payroll records with bank statements. Perform random
payroll audits to detect fraud or errors.

Case Study 3: What Internal Controls could be designed to provide reasonable assurance that all receipts are deposited?

1. Control Environment – Establish clear financial policies requiring all receipts to be deposited promptly. Prevent a single
individual from having complete control over receipt processing.
2. Risk Assessment – Identify risks related to missing deposits, unsegregated bookkeeping duties, and unauthorized fund
handling. Assess the likelihood of theft or fraud in receipt processing.
3. Control Activities – Enforce segregation of duties (separate receipt collection, ledger entry, and deposit tasks). Require
independent verification of all deposits by a second employee. Implement a policy requiring daily deposits of all collected
receipts.
4. Information and Communication – Maintain transparent records of all transactions, receipts, and deposits. Provide
management with regular financial reports on cash collections and deposits.
5. Monitoring Activities – Conduct regular independent audits to verify deposit accuracy. Perform unannounced cash counts and
reconciliations to detect discrepancies.

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