Reference no: EM13943954
European Imports is an importer of silver, brass, and furniture items from Spain. Eloise Stiles is the general manager of European Imports. Stiles employs two other people in the business.
Michelle Woods serves as the buyer for European Imports. In her work, Woods travels through- out Spain to find interesting new products. When Woods finds a new product, she arranges for European Imports to purchase and pay for the item. She helps the Spanish artisans prepare their invoices and then faxes the invoices to Stiles in the company office.
Stiles operates out of an office in Brooklyn, New York. The office is managed by Doreen Davis, who handles the mail, keeps the accounting records, makes bank deposits, and prepares the monthly bank reconciliation. Virtually all of European Imports' cash receipts arrive by mail-from sales made to Target, Crate and Barrel, and Williams-Sonoma.
Davis also prepares checks for payment based on invoices that come in from the suppliers who have been contacted by Woods. To maintain control over cash payments, Stiles examines the paperwork and signs all checks.
Requirement
1. Identify all the major internal control weaknesses in European Imports' system and how the resulting action could hurt European Imports. Also state how to correct each weakness.
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