Question

The following description represents the policies and procedures for agent expense reimbursements at Excel Insurance Company.

Agents submit a completed expense reimbursement form to their branch manager at the end of each week. The branch manager reviews the expense report to determine whether the claimed expenses are reimbursable based on the company’s expense reimbursement policy and reasonableness of amount. The company’s policy manual states that agents are to document any questionable expense item and that the branch manager must approve in advance expenditures exceeding $500.

After the expenses are approved, the branch manager sends the expense report to the home office. There, accounting records the transaction, and cash disbursements prepares the expense reimbursement check. Cash disbursements sends the expense reimbursement checks to the branch manager, who distributes them to the agents.

To receive cash advances for anticipated expenses, agents must complete a Cash Advance Approval form. The branch manager reviews and approves the Cash Advance Approval form and sends a copy to accounting and another to the agent. The agent submits the copy of the Cash Advance Approval form to the branch office cashier to obtain the cash advance.

At the end of each month, internal audit at the home office reconciles the expense reimbursements. It adds the total dollar amounts on the expense reports from each branch, subtracts the sum of the dollar totals on each branch’s Cash Advance Approval form, and compares the net amount to the sum of the expense reimbursement checks issued to agents. Internal audit investigates any differences.

Identify the internal control strengths and weaknesses in Excel’s expense reimbursement process. Look for authorization, recording, safeguarding, and reconciliation strengths and weaknesses.

Answer 1

Answer:

The following are internal control strengths and weaknesses in Excel's company expense reimbursement process for authorization,recording,safeguarding,and reconciliation:

	Authorization:	Recording:	Safe guarding:	Reconciliation :
strengths :	"Excel insurance company" has the arrangement of laws and approaches for specialist or agent reimbursement . Branch director has rights to concur the costs report before payment.	Accounting official has approved to affirm the forms of loans or cash advances and expenditure report. This is the correct method to record all approved and authorized exchange.	Cash disbursement  office has power to issue the expenditure reimbursement checks. Made the money reimbursements or repayments in the wake of accepting the receipt of approval form for expenditure report or loan.	Contrasting the repayment checks and expenditure report at time of internal audit . Examine the distinction of reconciliation.
weaknesses:	There is no limit for week after week cash advances on agens. Send the expenditure reimbursement checks to branch administrator for conveyance as opposed to sending to agent . Branch administrator licenses to present a fanciful or imaginary expenditure reimbursement for past agent and afterward make the cash for check.	Branch administrator doesn't keep up the duplicate copy of cash advance or expenditure report for the purpose behind auditing. Verification of the expenses report isn't produces the precise or accurate outcome.	The duplicate copy of approval form for expenditure report or loan is sent to branch cashiers. In this way, it tends to be contrast the copy and the submission form of agent. It doesn't require the supporting record or document for all costs.	Branch cashier payment had no reconciliation with cash advance or loan approval forms or structures.