GB518 Unit 5 Internal Controls and Cash Case Example

Course	GB518 Financial Accounting Principles and Analysis
Unit	Unit 5
Paper type	Internal controls and cash case
Length	About 840 words, 6 pages double-spaced
Format	APA 7 student paper
School	Purdue University Global
Program	MBA
Updated	October 2026

Free sample paper for GB518 Unit 5

One Bookkeeper, Every Cash Duty: A Unit 5 Internal Controls and Cash Case at a Family Furniture Store

[Student Name]

Purdue University Global

GB518: Financial Accounting Principles and Analysis

Unit 5 Internal Controls and Cash Case

[Instructor Name]

[Date]

The furniture store, its staff and every figure are composite and illustrative; the frameworks and sources cited are real.

What this part is doingNaming the unexplained difference in the lead tells the owner what the case will investigate.

The Facts

Hollis Home Furnishings, a family-owned store with two locations, has employed the same bookkeeper for fourteen years. She opens the mail, records customer payments, prepares and makes the bank deposits, writes checks for the owner's signature and reconciles the bank account each month. The owner signs checks but has not reviewed a bank reconciliation in years. In each of the last three months, the reconciliation has carried an "unlocated difference" forward: $380 in January, $445 in February and $510 in March.

Findings

Segregation of duties is absent. The same person handles cash, records it and reconciles it. The COSO framework treats segregation of incompatible duties as a basic control activity, because one person holding all three roles can both take cash and hide it (Committee of Sponsoring Organizations of the Treadway Commission, 2013).

There is no independent verification. No one reviews the reconciliation or compares deposits with sales records.

Access to check stock is unrestricted. Blank checks sit in an unlocked drawer in the office the bookkeeper uses.

There is no required vacation. In five years the bookkeeper has never been away for longer than a two-day stretch, so no one else has ever done her work.

Exhibit 1: March Bank Reconciliation

Bank side. Balance per bank statement, March 31: $41,860. Add deposits in transit: $6,420. Subtract outstanding checks: number 2214 for $1,180, number 2219 for $2,975 and number 2221 for $640, a total of $4,795. Adjusted bank balance: $43,485.

Book side. Balance per books, March 31: $45,310. Subtract bank service fees of $85 and a customer check returned for insufficient funds of $1,240. Add interest earned of $10. Adjusted book balance: $43,995.

Unexplained difference: $510, with the books higher than the bank.

The books show $510 more cash than the bank, the third month in a row with a growing gap, which is the pattern of deposits recorded but not fully made.

What this part is doingThe highlighted sentence interprets the reconciliation result as a pattern rather than a single error.

When the books are consistently higher than the bank after all known items are accounted for, the most common explanation is that cash recorded as received was not deposited. W. Steve Albrecht and colleagues describe this as skimming or lapping, schemes that thrive where one person controls receipts and records (Albrecht et al., 2019). The three months together total $1,335. The pattern does not prove theft, but it requires investigation.

Exhibit 2: Aging of Receivables

Hollis offers store credit on furniture purchases, and receivables total $86,000.

Current: $52,000, with an estimated 1 percent uncollectible, $520.

1 to 30 days past due: $18,500, at 4 percent, $740.

31 to 60 days past due: $9,800, at 15 percent, $1,470.

Over 60 days past due: $5,700, at 40 percent, $2,280.

The estimated allowance for doubtful accounts is $5,010, about 5.8 percent of receivables.

What this part is doingEstimating the allowance by age band shows the owner how much of the receivables balance is unlikely to become cash. The aging also matters for the control problem: customer payments on older accounts are where lapping, applying one customer's payment to another's account to hide a missing payment, is often concealed.

How to Handle the Bookkeeper Fairly

The findings point to weak controls, not yet to a person. The bookkeeper has served the family for fourteen years, and the differences could come from errors, such as deposits recorded on the wrong day, rather than theft. The owner should not accuse anyone before the investigation in recommendation 2 is complete. The new controls should be introduced as standard practice for a business of Hollis's size, which they are, and applied to everyone who handles cash. If the review finds missing deposits, the outside accountant can advise on next steps, including whether to involve the store's insurer and legal counsel.

Recommendations by Risk and Cost

1. Separate receipt, recording and reconciliation, immediately. The owner's daughter, who manages the second store's office, should open the mail and list every check received; the bookkeeper records payments from that list; the owner reviews and signs each monthly reconciliation. Cost: about four hours a month of the daughter's and owner's time. Risk removed: the largest, since it ends one person's control of the whole cash cycle.

2. Investigate the three months of differences. Engage an outside accountant to compare deposit slips with recorded receipts and customer statements for January to March. Cost: about $3,000. Risk removed: unknown losses continuing undetected.

3. Move customer payments to a bank lockbox. Cost: about $45 a month. Risk removed: most cash handling in the office.

4. Lock the check stock and require two signatures above $2,500. Cost: negligible. Risk removed: unauthorized checks.

5. Require the bookkeeper to take a full week of vacation each year, with the owner's daughter covering. Cost: some disruption. Risk removed: concealment that depends on one person always being present.

The Association of Certified Fraud Examiners reports that small businesses suffer losses from occupational fraud that are large relative to their size and that missing controls are a leading cause (Association of Certified Fraud Examiners, 2024). Recommendations 1 and 2 should start this week.

References

Albrecht, W. S., Albrecht, C. O., Albrecht, C. C., & Zimbelman, M. F. (2019). Fraud examination (6th ed.). Cengage.

Association of Certified Fraud Examiners. (2024). Occupational fraud 2024: A report to the nations.

Committee of Sponsoring Organizations of the Treadway Commission. (2013). Internal control: Integrated framework.

The Purdue Global GB518 Unit 5 instructions

GB518 Unit 5 asks you to diagnose cash and control problems in a case and recommend fixes. Summarize the facts as a manager would brief them. Name each control weakness and the principle it breaks, such as segregation of duties, independent verification, physical control of assets and required vacations. Rebuild the bank reconciliation with the bank side and book side prepared separately, including deposits in transit, outstanding checks, bank fees and returned checks, and highlight any unexplained difference and its pattern. Age the receivables into time bands and estimate the allowance. Treat the people involved fairly, separating weak controls from proof of wrongdoing. Close with prioritized recommendations, each with its cost and the risk it removes. Cite control and fraud sources in APA 7.

How this GB518 Unit 5 example is built

The facts describe one bookkeeper handling every cash duty for fourteen years and growing unlocated differences. Findings name absent segregation of duties, citing the COSO framework, no independent review, unlocked check stock and no required vacation. Exhibit 1 reconciles a $41,860 bank balance to $43,485 and a $45,310 book balance to $43,995, leaving $510, which the highlighted sentence reads as a pattern, and Albrecht and colleagues describe skimming and lapping. Exhibit 2 ages receivables from $52,000 current to $5,700 over 60 days, for a $5,010 allowance. A section advises against accusing the bookkeeper before investigation. Five recommendations follow, from separating duties for about four hours a month and a $3,000 outside review to a $45 lockbox, locked checks with dual signatures and a required week of vacation, citing the Association of Certified Fraud Examiners.

Where the points sit in the GB518 Unit 5 rubric

GB518 instructors look for weaknesses tied to control principles and a reconciliation built correctly. Each finding should name the principle it breaks. The bank reconciliation should adjust the bank and book sides separately, and an unexplained difference should be highlighted and read as a pattern when it recurs. An aging schedule with a reasoned allowance shows receivables are understood. Fair treatment of the people involved shows judgment. Recommendations earn the most when they are ranked by risk and cost and assigned specific steps. The case leans in APA 7 on the COSO internal control framework, Albrecht and colleagues on fraud schemes and the ACFE's report on occupational fraud.

Common GB518 Unit 5 mistakes, and how to avoid them

Many GB518 Unit 5 cases list control principles from the textbook without connecting them to the facts. Others prepare the reconciliation as a single list, mixing bank and book items. A common gap is the pattern: a small unexplained difference repeated and growing each month signals a problem that one month's figure hides. Some writers accuse an employee on weak evidence. Brief the facts, tie each weakness to a principle, reconcile both sides separately, highlight and trace the difference, age receivables, treat people fairly and rank fixes by risk and cost.

Get a GB518 Unit 5 example written to your instructions

Every internal controls case uses its own company and its own clues, and the custom Unit 5 sample follows the GB518 case your section assigned. Send the case, the instructions and the rubric. Within 24 to 48 hours it returns with the exhibits your prompt calls for and ranked recommendations. Nothing is charged for the first. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.

More GB518 papers and MBA samples

GB518 Unit 5 questions, answered

What does segregation of duties mean for a business with only a few employees?

Splitting incompatible tasks even when staff are few. The person who handles cash should not also record it or reconcile the account. In a very small business, the owner often takes one role, such as opening the bank statement or reviewing the reconciliation. The finished GB518 case recommends exactly that kind of low-cost split before anything expensive.

Should the bank reconciliation balance in the case?

Only if the facts allow it. When a case involves suspected theft, the reconciliation often exposes an unexplained difference, and reporting that difference is the point. Plugging it to zero hides the finding. When the case contains no irregularity, the corrected book and bank balances should match, and a remaining gap signals an error still waiting to be found.

How many recommendations does a strong case include?

Usually three to five, ranked. Fewer can look thin, and a long list suggests no prioritization. Each recommendation names who does what, what it costs, and which weakness it closes. Graduate graders in GB518 tend to reward a short ranked list over a long unranked one, because choosing among controls is the managerial skill being tested.

Where can I find a free GB518 Unit 5 sample paper?

This page carries a full GB518 Unit 5 internal controls and cash case for a furniture store, with a bank reconciliation, a receivables aging, ranked control fixes and APA 7 references.

Why is the $510 difference a concern?

The books show more cash than the bank after all known items, and the gap has grown for three months, from $380 to $445 to $510. That pattern is consistent with recorded receipts not being fully deposited and requires investigation.