Green Tech Solutions, a company specializing in renewable energy products, has appointed you as the Internal Auditor for the year 2023-24. During your review of the internal controls within the Sales Department, you obse

The general condition pertaining to the internal check system may be summarized as under: No single person should have complete control over any important aspect of the business operation. Every employee's action should come under the review of another person. Staff duties should be rotated from time to time so that members do not perform the same function for a considerable length of time. Every member of the staff should be encouraged to go on leave at least once a year. Persons having physical custody of assets must not be permitted to have access to the books of accounts. There should exist an accounting control in respect of each class of assets, in addition, there should be periodical inspection so as to establish their physical condition. Mechanical devices should be used, where ever practicable to prevent loss or misappropriation of cash. Budgetary control should be exercised and wide deviations observed should be reconciled. For inventory taking, at the close of the year, trading activities should, if possible be suspended, and it should be done by staff belonging to several sections of the organization. The financial and administrative powers should be distributed very judiciously among different officers and the manner in which those are actually exercised should be reviewed periodically. Procedures should be laid down for periodical verification and testing of different sections of accounting records to ensure that they are accurate. In the given scenario, Company has not done proper division of work as: The receipts of cash should not be handled by the official handling sales ledger and Delivery challans should be verified by an authorized official other than the officer handling dispatch of goods.