Dear Mr. Mays:
After a thorough review of Manhattan Company’s internal controls over mail cash receipts improvements can be made in segregation of duties, documentation procedures and establishment of responsibility documentation procedures.
It is commendable that checks received are endorsed “for deposit only” promptly and the cashier making the deposit, but else where there is ...view middle of the document...
Second, the mail clerks should document the checks on two identical lists. The list should include information such as name of person/company giving the check, the reason it was sent, and amount. To establish responsibility both mail clerks must sign the list. At this point the clerks must send the original list and cash to the cashier who makes the deposit and the second list should be sent to treasurer’s office for verification. The cashier should not be involved in the opening of the mail or in the accounting process, and employees who are involved in keeping records should never have custody of assets being recorded.
The segregation of duties among mail clerks, cashier, and accounting separate as well as requiring the lists of cash received with signatures will greatly increase the safety of the company’s cash assets.
Auditor for the CPA firm Croix, Marais, and Kale