Reference no: EM132091069

Question: Identifying Internal Control Weaknesses in Descriptions of Cash Payment Processes Each situation below describes an internal control weakness in the cash payments process. Identify which of the five internal control principles is violated, explain the weakness, and then suggest a change that would improve internal control.

1) The warehouse clerk is responsible for ordering inventory when levels become low, and advising the accounting department to issue a payment to the supplier when ordered goods are received.

2) For each purchase, the accountant compares the purchase order (prepared by the purchasing manager) to the receiving report (prepared by warehouse employees), and then attaches these documents to the corresponding supplier invoice and files them by supplier name. The accountant then prepares a check, which the owner merrily signs and sends to the mail clerk for mailing.

3) The petty cash custodian prepared a template for petty cash receipts using Microsoft Word and e-mailed a copy of it to employees in his department for them to use when submitting their reimbursement claims.

4) The check-signing machine is stored with a supply of blank checks in the lunch room closet.

5) Purchase orders can be approved by the purchasing manager, accountant, or warehouse supervisor, depending on who is least busy.

6) The petty cash custodian assists the assistant controller by preparing the monthly bank reconciliation.