Identify the internal control weakness over cash payments.

Question Evaluating internal control over cash payments Gary’s Great Cars purchases high-performance auto parts from a Nebraska vendor. Dave Simon, the accountant for Gary’s, verifies receipt of merchandise and then prepares, signs, and mails the check to the vendor.

Requirements

1. Identify the internal control weakness over cash payments.

2. What could the business do to correct the weakness?

Expert Solution

Step 1: Definition of internal control over cash payments

Internal control over cash payments means controlling the activities of cash payments.

Step 2: Internal control weakness

The weakness of internal control is that one person is performing all responsibilities. Hence, the main weakness is the assignment of responsibilities

Step 3: Way to correct the weakness

This weakness is correct by assigning different responsibilities to different persons.

There is a weakness in the assignment of responsibilities.

Sahil Dangi answered 2 years ago

1. Identify the internal control weakness over cash receipts.

Evaluating internal control over cash receipts Dogtopia sells pet supplies and food and handles all sales with a cash register. The cash register displays the amount of the sale. It also shows the cash received and any change returned to the customer. The register also produces a customer receipt butkeeps no internal record of the transactions. At the end of the day, the clerk counts the cash in the register and gives it to the cashier for deposit in the...

Each situation below describes an internal control weakness in the cash payments process. Identify which of...

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...

Identify three different questions that might indicate internal control weakness specially internal controls over the order-to-cash...

Identify three different questions that might indicate internal control weakness specially internal controls over the order-to-cash process.

Prepare an internal control questionnaire to be used in evaluating the internal control over cash receipts...

Prepare an internal control questionnaire to be used in evaluating the internal control over cash receipts and cash disbursements. The internal control questionnaire should elicit a yes or not response to each question.

Correcting internal control weaknesses Each of the following situations has an internal control weakness.

Correcting internal control weaknesses Each of the following situations has an internal control weakness. a. Upside-Down Applications develops custom programs to customers’ specifications. Recently, development of a new program stopped while the programmers redesigned Upside-Down’s accounting system. Upside-Down’s accountants could have performed this task. b. Norma Rottler has been your trusted employee for 24 years. She performs all cash handling and accounting duties. Norma just purchased a new luxury car and a new home in an expensive suburb. As owner...

Identify the principles of internal control. Explain the use of cash and internal controls to prevent...

Identify the principles of internal control. Explain the use of cash and internal controls to prevent fraud. Explain why corporations invest in stocks and debt securities. Describe how debt and stock investments are reported in financial statements. Evaluate the effects of unusual or irregular items on financial statements.

How could Franklin avoid this internal control weakness?

Question Applying internal control over cash payments by check A purchasing agent for Franklin Office Supplies receives the goods that he purchasesand also approves payment for the goods. Requirements1. How could this purchasing agent cheat his company?2. How could Franklin avoid this internal control weakness?

9.An internal auditor is required to include significant deficiencies and material weakness in internal control in...

9.An internal auditor is required to include significant deficiencies and material weakness in internal control in a report prepared under Government Auditing Standards. The auditor is not required to distribute the report to The appropriate officials of the organization audited. Specific legislative and regulatory bodies. Officials of the organizations being audited who required or arranged for the audit. 4.The Securities and Exchange Commission 17.An audit of a local government that expends federal financial assistance is subject to the requirements of...

internal Control of Cash Payments Abbe Co. is a small merchandising company with a manual accounting...

internal Control of Cash Payments Abbe Co. is a small merchandising company with a manual accounting system. An investigation revealed that in spite of a sufficient bank balance, a significant amount of available cash discounts had been lost because of failure to make timely payments. In addition, it was discovered that the invoices for several purchases had been paid twice. Indicate whether the procedures listed below for the payment of vendors' invoices would reduce the possibility of losing available cash...

If an auditor identifies an internal control weakness for an assertion, how does it affect the...

If an auditor identifies an internal control weakness for an assertion, how does it affect the audit strategy? If the auditor identifies an internal control strength for an assertion, how does it affect the audit strategy?

Question