Posted: April 10th, 2021
The following control procedures are used in Kelton Company for over-the-counter cash receipts.
(a) For each procedure, explain the weakness in internal control and identify the control principle that is violated.
|1.||Each store manager is responsible for interviewing applicants for cashier jobs. They are hired if they seem honest and trustworthy.|
|2.||All over-the-counter receipts are registered by three clerks who share a cash register with a single cash drawer.|
|3.||To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked attaché case in the stock room until it is deposited in the bank.|
|4.||At the end of each day the total receipts are counted by the cashier on duty and reconciled to the cash register total.|
|5.||The company accountant makes the bank deposit and then records the day’s receipts.|
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