Monday, January 25, 2016

What control procedure of a business's system of internal control is violated in this situation?The ticket seller at a movie theater doubles as a...

One of the ways of controlling dishonest practices in an
organization is to divide the jobs in such a way that an employee will find it difficult
to commit dishonest acts without colluding with one or more other employees. This method
of controlling dishonesty assumes that need for collusion between more than one
employees increases the risk of detection for each employee, thereby discouraging
dishonest practice. Also when dishonest acts require collusion between more than one
employee, the commitment of dishonest act involves the additional activity and risk of
forming the collusion relationship.


In the case cited above
this principle of control appears to be violated. When the ticket seller and ticket
checker are two different persons, the ticket checker will find it more difficult to
admit a person in the movie theater and let him occupy a seat, because if subsequently
the ticket seller sells tickets for the seats occupied by the person without the
tickets, this dishonest act will become known to others in the organization. However if
the ticket checker acts as a ticket seller even for a short period in a day, it will be
easier to manipulate the system so that seat assigned to a person admitted without
ticket is not sold to anyone else.

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