The following control procedures are used at Torres Company for over-the-counter cash receipts.
- 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.
- All over-the-counter receipts are registered by three clerks who use a cash register with a single cash drawer.
- The company accountant makes the bank deposit and then records the day”s receipts.
- At the end of each day, the total receipts are counted by the cashier on duty and reconciled to the cash register total.
- Cashiers are experienced; they are not bonded.
Instructions
(a)For each procedure, explain the weakness in internal control, and identify the control principle that is violated.
(b)For each weakness, suggest a change in procedure that will result in good internal control.