Case Study - Drotos Theaters (Auditing) Essay Example | Topics and Well Written Essays - 2250 words

Case Study - Drotos Theaters (Auditing) - Essay Example An evaluation of the manual and computerized control activities found that the computerized accounting system is accessed only when the controller posts the journal entries into the financial accounting system. Since the computerized system does not aid in the detection of miscalculations or frauds before the entries are made an incorrect number can easily go undetected and cause a serious accounting problem. The controller is responsible for manually depositing cash and recording transactions. Delegating these two important duties to the same person leaves the company with no system of internal control. The cashiers collect cash at the box office and issue tickets to customers. The company does not specify how the cashiers are accountable for the cash they collect and the tickets that they issue. The cashiers are the first point of contact between the customers and company’s cash transaction and therefore it is crucial to ensure that this transaction has a fool-proof control system. Since the ticket taker manually collects tickets it is not guaranteed that they will not allow unauthorized persons into the theater. There are many internal controls which are not present in the existing system. The controller cannot be responsible for recording the transactions and depositing money into the bank account. The controller can easily adjust the deposited amount and recorded amount according to how they see fit causing a serious lack of internal control.