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The following control procedures are used in Burwy's Boutique Shoppe for cash disbursements (a) For each procedure, explain the weakness in internal control and identify the internal control principle that is violated For each weakness, suggest a change in the procedure that will result in good internal control (b) 1 Company checks are stored in an unmarked erwelope on a shelf behind the cash register (a) Weakness Principle (b) Recommended Change 2 The store manter personally approves all payments before she signs and issues checks 2 The store manager personally approves all payments before she signs and issues checks. (a) Weakness: The approval and payment of bills is done by the same individual Principle: Segregation of Duties (b) Recommended Change The store manager should approve bills for payment and the treasurer should sign and issue checks 3. The store purchases used goods for resale from people that bring items to the store. Since that can occur anytime that the store authorized to purchase goods for resale by disbursing cash from the register. The purchase is documented by having the store e paper a description of the item that was purchased and the amount that was paid. The employee then signs the paper and puts i (a) Weakness 3 The store purchases used goods for resale from people that bring items to the store. Since that can occur anytime that the store authorized to purchase goods for resale by disbursing cash from the register. The purchase is documented by having the store e paper a description of the item that was purchased and the amount that was paid. The employee then signs the paper and puts i (a) Weakness Principle S. (b) Recommended Change 4 After payment, bills are "hled"in a paid invoice folder 4. 4 After payment, bills are filed in a paid invoice folder. (a) Weakness Filing does not prevent a bill from being paid more than once. Principle: Documentation Procedures (b) Recommended Change: Bilis should be stamped PAID after payment 5. The company accountant prepares the bank reconciliation and reports any discrepancies to the owner. (a) Weakness: The bank reconciliation is not independently prepared Principles Independent Internal Verification (b) Recommended Change Someone with no other cash responsibilities should prepare the bank reconciliation

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