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Identify internal control weaknesses over cash disbursements and suggest improvements. E8.3 (LO 1, 2), E The following control procedures are used in Mendy Lang's Boutique Shoppe for cash disbursements. 1. The company accountant prepares the bank reconciliation and reports any discrepancies to the owner. 2. The store manager personally approves all payments before signing and issuing checks. 3. Each week, 100 company checks are left in an unmarked envelope on a shelf behind the cash register. 4. After payment, bills are filed in a paid invoice folder. 5. The company checks are unnumbered. Instructions a. For each procedure, explain the weakness in internal control, and identify the internal control prin- ciple that is violated. b. For each weakness, suggest a change in the procedure that will result in good internal control.

Identify internal control weaknesses over cash disbursements and suggest improvements. E8.3 (LO 1, 2), E The following control procedures are used in Mendy Lang's Boutique Shoppe for cash disbursements. 1. The company accountant prepares the bank reconciliation and reports any discrepancies to the owner. 2. The store manager personally approves all payments before signing and issuing checks. 3. Each week, 100 company checks are left in an unmarked envelope on a shelf behind the cash register. 4. After payment, bills are filed in a paid invoice folder. 5. The company checks are unnumbered. Instructions a. For each procedure, explain the weakness in internal control, and identify the internal control prin- ciple that is violated. b. For each weakness, suggest a change in the procedure that will result in good internal control.

Auditing: A Risk Based-Approach (MindTap Course List)
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter10: Auditing Cash, Marketable Securities, And Complex Financial Instruments
Section: Chapter Questions
Problem 20RQSC
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Submit it in excel form E8.3
Identify internal control weaknesses over cash disbursements and suggest improvements. E8.3 (LO 1, 2), E The following control procedures are used in Mendy Lang's Boutique Shoppe for cash disbursements. 1. The company accountant prepares the bank reconciliation and reports any discrepancies to the owner. 2. The store manager personally approves all payments before signing and issuing checks. 3. Each week, 100 company checks are left in an unmarked envelope on a shelf behind the cash register. 4. After payment, bills are filed in a paid invoice folder. 5. The company checks are unnumbered. Instructions a. For each procedure, explain the weakness in internal control, and identify the internal control prin- ciple that is violated. b. For each weakness, suggest a change in the procedure that will result in good internal control.
Transcribed Image Text:Identify internal control weaknesses over cash disbursements and suggest improvements. E8.3 (LO 1, 2), E The following control procedures are used in Mendy Lang's Boutique Shoppe for cash disbursements. 1. The company accountant prepares the bank reconciliation and reports any discrepancies to the owner. 2. The store manager personally approves all payments before signing and issuing checks. 3. Each week, 100 company checks are left in an unmarked envelope on a shelf behind the cash register. 4. After payment, bills are filed in a paid invoice folder. 5. The company checks are unnumbered. Instructions a. For each procedure, explain the weakness in internal control, and identify the internal control prin- ciple that is violated. b. For each weakness, suggest a change in the procedure that will result in good internal control.
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