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a. Jake Bates has been an employee of the city of Elmhurst for many years. Because the city is small, Bates performs all of its accounting duties, in addition to opening the mail and preparing bank deposits and bank reconciliations. b. A purchasing agent for Mark Manufacturing is responsible for buying diamonds for use in the company's manufacturing process, approving the invoices for payment, and signing the checks. No supervisor reviews the purchasing agent's work. C. Bailey Price owns an architectural firm. Price's staff consists of 16 professional architects, and Price manages the office. Often her work requires her to travel to meet with clients. During the past six months, Price has observed that when she returns from a business trip, the architecture jobs in the office have not progressed satisfactorily. She learns that when she is away, two of her senior architects take over office management and neglect their normal duties. One employee could manage the office. Fach of the following situations reveals an internal control weakness: (Click on the icon to view the situations.) Requirements 1. Identify the missing internal control characteristic in each situation. 2. Identify each organization's possible problem. 3. Propose a solution to the problem. Situation a. Jake Bates has been an employee of the city of Elmhurst for many years. Because the city is small, Bates performs all of its accounting duties, in addition to opening the mail and preparing bank deposits and bank reconciliations Requirement 1. Missing Control Characteristic: Requirement 2. Possible Problem: Requirement 3. Potential Solution: Situation b. A purchasing agent for Mark Manufacturing is responsible for buying diamonds for use in the company's manufacturing process, approving the invoices for payment, and signing the checks. No supervisor reviews the purchasing agent's work. Requirement 1. Missing Control Characteristic: Requirement 1. Missing Control Characteristic: Requirement 2. Possible Problem: Requirement 3. Potential Solution: Situation c. Bailey Price owns an architectural firm. Price's staff consists of 16 professional architects, and Price manages the office. Often her work requires her to travel to meet with clients. During the past six months, Price has observed that when she returns from a business trip, the architecture jobs in the office have not progressed satisfactorily. She learns that when she is away, two of her senior architects take over office management and neglect their normal duties. One employee could manage the office. Requirement 1. Missing Control Characteristic: Requirement 2. Possible Problem: Requirement 3. Potential Solution: Click to select your answer(s). Have the owner stay in the office. Assign only a single employee to manage when owner is absent. Hire a worker from a temporary agency. Requirement 1. Missing Control Characteristic: Requirement 2. Possible Problem: Requirement 3. Potential Solution: Situation b. A purchasing agent for Mark Manufa purchasing agent's work. Assignment of responsibility Competent personnel Inappropriate documents Internal audit Proper authorization Separation of duties Requirement 1. Missing Control Characteristic: Click to select your answer(s). Requirement 2. Possible Problem: Requirement 3. Potential Solution: Lost profits Situation b. A purchasing agent for Lost revenues purchasing agent's work. Theft of cash Requirement 1. Missing Control Charavienistu. sponsib Requirement 3. Potential Solution: Situation b. A purchasing agent for purchasing agent's work. Requirement 1. Missing Control Ch Hire a security guard. Install a surveillance camera. Separate cash handling duties from accounting duties. Separate bank reconciliation from other duties. Click to clot Vou Anwortel Requirement 1. Missing Control Characteristic: Requirement 2. Possible Problem: Requirement 3. Potential Solution: Situation c. Bailey Price owns an architectural fir observed that when she returns from a business normal duties. One employee could manage the Assignment of responsibility Competent personnel Inappropriate documents Internal audit Proper authorization Separation of duties onal archite have not pro Requirement 1. Missing Control Characteristic: Requirement 2. Possible Problem: Requirement 3. Potential Solution: Situation c. Bailey Price owns an are observed that when she returns from normal duties. One employee could Lost profits due to inefficiency Lost revenues due to low-quality work Theft of cash or diamonds ssional a e haven Requirement 1. Missing Control Characteristic: Requirement 3. Potential Solution: nd Price manages the sed satisfactorily. She Situation c. Bailey Price owns an are observed that when she returns from Fire the purchasing agent. normal duties. One employee could Separate purchasing, approval, and check signing duties. Requirement 1. Missing Control Characteristic: Requirement 1. Missing Control Characteristic: Requirement 2. Possible Problem: Assignment of responsibility Competent personnel Inappropriate documents Internal audit Proper authorization Requirement 3. Potential Solution: Situation c. Bailey Price owns an architectural fir observed that when she returns from a business normal duties. One employee could manage the onal architects, and Prid have not progressed sa Separation of duties Requirement 1. Missing Control Characteristic: Requirement 2. Possible Problem: Requirement 3. Potential Solution: Lost revenues because employees are neglecting regular duties Theft when manager is out of town Click to select your answer(s)