The following description represents the policies andprocedures for agent expense reimbursements at Excel InsuranceCompany.

Agents submit a completed expense reimbursement form totheir branch manager at the end of each week. The branch managerreviews the expense report to determine whether the claimedexpenses are reimbursable based on the company’s expensereimbursement policy and reasonableness of amount. The company’spolicy manual states that agents are to document any questionableexpense item and that the branch manager must approve in advanceexpenditures exceeding $500.

After the expenses are approved, the branch managersends the expense report to the home office. There, accountingrecords the transaction, and cash disbursements prepares theexpense reimbursement check. Cash disbursements sends the expensereimbursement checks to the branch manager, who distributes them tothe agents.

To receive cash advances for anticipated expenses,agents must complete a Cash Advance Approval form. The branchmanager reviews and approves the Cash Advance Approval form andsends a copy to accounting and another to the agent. The agentsubmits the copy of the Cash Advance Approval form to the branchoffice cashier to obtain the cash advance.

At the end of each month, internal audit at the homeoffice reconciles the expense reimbursements. It adds the totaldollar amounts on the expense reports from each branch, subtractsthe sum of the dollar totals on each branch’s Cash Advance Approvalform, and compares the net amount to the sum of the expensereimbursement checks issued to agents. Internal audit investigatesany differences.

Identify the internal control strengths and weaknessesin Excel’s expense reimbursement process. Look for authorization,recording, safeguarding, and reconciliation strengths andweaknesses.