Question

Determine whether eac tify the internal contro 1. The same employee re each procedure described below is an internal control strength or weakness, then iden- ontrol principle violated or followed for each procedure. me employee requests, records, and makes payment for purchases of inventory. many saves money by having employees involved in operations perform the only review of Exer Inter and 2. The company saves money internal controls. Time is saved by not updating records for use of supplies. The recordkeeper is not allowed to write checks or initiate EFTs. 5. Each salesclerk is in charge of her own cash drawer.

Answer 1

1. Internal control weakness as there is violation of internal control principle of Segregation of duties which is required for critical task of purchases.

2. Internal control strength as Performing Regular Independent Reviews has been followed provided the employees who are not part of the operations team has reviewed the internal controls as per standard operating policy of the company.

3. Internal control weakness as there is violation of internal control principle of Maintaining Records which is required to keep proper records as required by statute.

4. Internal control strength as the Segregation of duties has been followed which is required for keeping control on payments.

5. Internal control strength as the Establishment of Responsibilities has been followed which is the person who is collecting cash is held responsible for the safety of the cash until cash is given to the cashier at day end which should be the ideal control.