Part 1)
Please respond to the following:
Identify and discuss the six principles of control activities. Suggest the two most important principles for an online retail business versus a brick-and-mortar retail business. Provide support for your rationale.
Part 2)
Hello class,
Identify and discuss the six principles of control activities:The six principles of control activities are 1.) Establishment of responsibility, assigning responsibility to specific employees, 2.) Segregation of duties, is assigning different tasks to different individuals that way no one employee can perform, record, and reconcile a task, 3.) Documentation procedures, this requires that employees forward all accounting entries to the accounting department, 4.) Physical controls, this regulates the safeguarding of assets and information, 5.) Independant internal verification, the review, comparison, and reconciliation of information from at least two sources, 6.) Human resource controls, controls that focus on employee behavior, performance, and ensuring that employees are upholding policies and procedures.
Suggest the two most important principles for an online retail business versus a brick-and-mortar retail business. The most important principles for an online retail business I think would be Segregation of duties and Documentation procedures. This would ensure that no one person has the ability to oversee all financial aspects on the online company and provide excellent documentation as to where all money is going and what profits are coming in. For a brick-and-mortar retail business the most important principles would be establishment of responsibility so all employees are well aware of what their roles and responsibilities are, and human resource controls, this ensures that all employees are performing at an adequate level and are in full understanding of the policies and procedures.
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