ACC220WK4DUE (2) - E4-5 At Idaho Company checks are not...

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E4-5 At Idaho Company checks are not prenumbered because both the purchasing agent and the treasurer are authorized to issue checks. Each signer has access to unissued checks kept in an unlocked file cabinet. The purchasing agent pays all bills pertaining to goods purchased for resale. Prior to payment, the purchasing agent determines that the goods have been received and verifies the mathematical accuracy of the vendor’s invoice. After payment, the invoice is filed by vendor and the purchasing agent records the payment in the cash disbursements journal. The treasurer pays all other bills following approval by authorized employees. After payment, the treasurer stamps all bills “paid,” files them by payment date, and records the checks in the cash disbursements journal. Idaho Company maintains one checking account that is reconciled by the treasurer. Instructions (a) List the weaknesses in internal control over cash disbursements. (b) Write a memo indicating your recommendations for improving company procedures. The potential weaknesses I see happeninin Idaho Company is a big mistake in internal control of pre-numbering checks. Having this feature on your checks helps the company keep track of the exact number of check, the date it was written, proof of payment. Plus having pre- numbered checks also prevents internal employees from within the company ever trying to take a chance and write out a check for themselves. There will always be records in the checkbook, plus you will always have a copy of the payment as a hard copy in the filing
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This note was uploaded on 01/07/2012 for the course COM 155 155 taught by Professor Shepherd during the Spring '10 term at University of Phoenix.

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ACC220WK4DUE (2) - E4-5 At Idaho Company checks are not...

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