Controls effective in offsetting the weakness


During the consideration of a small business client's internal controls, the fraud examiner discovered that the accounts receivable clerk approves credit memos and has access to cash. Which of the following controls would be most effective in offsetting this weakness?

a. The owner reviews errors in billings to customers and postings to the subsidiary ledger.

b. The controller receives the monthly bank statement directly and reconciles the checking accounts.

c. The owner reviews credit memos after they are recorded.

d. The controller reconciles the total of the detail accounts receivable accounts to the amount shown in the ledger.

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Accounting Basics: Controls effective in offsetting the weakness
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