The following control procedures are used at Melora Company for overthecounter cash receipts.
a To minimize the risk of robbery, cash in excess of $ is stored in an unlocked briefcase in the stock room until it is deposited in the bank.
b All overthecounter receipts are registered by three clerks who use a cash register with a single cash drawer.
c The company accountant makes the bank deposit and records the day's receipts.
d At the end of each day, the total receipts are counted by the cashier on duty and reconciled to the cash register total by the cashier.
e Cashiers are experienced; they are not bonded.
INSTRUCTIONS:
For each procedure, explain the weakness in internal control, and identify the control principleelement that is violated.
For each weakness, suggest a change in procedure that will result in good internal control.
USE A COMPLETE SENTENCE FOR WEAKNESSES AND RECOMMENDATIONS.
Elements of Internal Control
Establish responsibility
Documentation of Procedures
Independent Internal Verification
Separation of Duties
Physical, Mechanical and Electronic Controls
Human Resource Controls
tableWHAT IS WEAKNESS?,tableCONTROLPRINCIPLEELEMENTRECOMMENDATION
