The smallest branch of Super Fresh Cosmetics in Iloilo City employs Mary Santos, the branch manager, and her sales assistant, Jane Reyes. The branch uses as bank account in Iloilo City to pay expenses. The account is kept in the name of "Super Fresh Cosmetics Special Account". To pay expenses, checks must be signed by Mary Santos or by the treasurer of Super Fresh Cosmetics, Juan Dy. Mary receives the cancelled checks and bank statements. She reconciles the branch account herself and files cancelled checks and bank statements in her records. She also periodically prepares reports of cash disbursements and sends them to the home office. a. What are the control weaknesses you noted? b. Give internal control activities to prevent/detect/correct the said weaknesses.
The smallest branch of Super Fresh Cosmetics in Iloilo City employs Mary Santos, the branch manager, and her sales assistant, Jane Reyes. The branch uses as bank account in Iloilo City to pay expenses. The account is kept in the name of "Super Fresh Cosmetics Special Account". To pay expenses, checks must be signed by Mary Santos or by the treasurer of Super Fresh Cosmetics, Juan Dy. Mary receives the cancelled checks and bank statements. She reconciles the branch account herself and files cancelled checks and bank statements in her records. She also periodically prepares reports of cash disbursements and sends them to the home office.
a. What are the control weaknesses you noted?
b. Give internal control activities to prevent/detect/correct the said weaknesses.
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