Problem
A. A furniture store sells merchandise on credit with internal financing. Salespeople sometimes sell furniture on credit to friends and relatives. How does the store owner ensure that the only authorized employees can extend credit and record payments and adjustments on credit accounts? Identify the various controls that should be implemented in the furniture store system to ensure that corrections to customer balances are made only by someone with proper authorization.
B. A bookkeeper uses accounting software to generate electronic payments to suppliers. How does the system ensure that the payment is for goods or services that were actually received? How does the system ensure that no one can generate payments to a bogus supplier? What kind of controls would you implement to ensure that checks are written only to valid suppliers, that checks are written for the correct amount, and that all payouts have required authorization?