Weaknesses in internal controls

Reference no: EM1355765

The following control procedures are used at Sandwich Company for over-the-counter cash receipts.

1. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked attaché case in the stock room until it is deposited in the bank.
2. All over-the-counter receipts are registered by three clerks who use a cash register with a single cash drawer.
3. The company accountant makes the bank deposit and then records the day's receipts.
4. At the end of each day, the total receipts are counted by the cashier on duty and reconciled to the cash register total.
5. Cashiers are experienced; they are not bonded.

Instructions:

a) For each procedure, explain the weakness in internal control, and identify the control principle that is violated.

b) For each weakness, suggest a change in procedure that will result in good internal control.

Reference no: EM1355765

Questions Cloud

Internal controls-payroll cycle : Please provide an explanation of the strengths and weaknesses of the internal controls related to the payroll cycle.

What is the tension in the cable closer to the painter : At t=0 a grinding wheel has an angular velocity of 20.0 rad/s. It has the constant angular acceleration of 29.0 rad/s^2 until a circuit breaker trips at time t = 2.20 s. From then on, it turns through an angle 435 rad as it coasts to a stop at cons..

Illustrate what does gdp income leave out : Illustrate what does GDP income leave out. Should a country meet additional quantifiable goals before being considered "developed".

Manage integration and responsiveness : Explain wat are some best practices for managing integration and responsiveness and why are flexibility and adaptability important for transnational organizations?

Weaknesses in internal controls : The following control procedures are used at Sandwich Company for over-the-counter cash receipts. For each procedure, explain the weakness in internal control, and identify the control principle that is violated.

Ethical decision-making process : A description of Canadian Code of Ethics for Psychologists: The 10-step ethical decision-making process.

Purchase accounting methods : Suppose that firm X acquires firm Y by paying cash for all the shares outstanding at a merger premium of $5 per share. Suppose that neither firm has any debt before of after the merger

Find the distance between the point of firing : A 2 kg projectile is fired with an initial speed of 135 m/s at an angle of 68° with the horizontal. At the top of its trajectory, the projectile explodes into two fragments of masses 0.72 kg and 1.28 kg. At 3.8 s after the explosion, the 1.28 kg f..

What are internal controls : Explain some common internal controls that a company might have in place. What are they designed to protect? What are the reporting requirements regarding internal controls in the Sarbanes-Oxley Act?

User Account

All Pages