Question: Identify the internal control weaknesses in each of the following

Identify the internal control weaknesses in each of the following situations.
1. Richard Tuiamu, a football star at the local university, was hired by football supporter R.U. Shore to work in the accounting department of Shore Machining during summer vacation. Providing summer jobs is one way Shore supports the team. After a week of training, Tuiamu opened the mail containing checks from customers, recorded the payment in the books, and prepared the bank deposit slip.
2. Juan Vargas manages a local franchise of a major 24-hour convenience store. Vargas brags that he keeps labor costs well below the average for such stores by operating with only one clerk. He has not granted a pay increase in 4 years. He loses a lot of clerks, but he can find replacements.
3. Clarence Opheim operates an Exxon service station. Because it takes much extra time for attendants to walk from the gas pumps to the inside cash register, Opheim placed a locked cash box next to the pumps and gave each attendant a key. Cash and credit card slips are placed in the cash box. Each day the amounts are counted and entered in total into the cash register.
4. Lazlo Galetta trusts his employees. The former manager purchased fidelity bonds on employees who handle cash. Galetta decided that such bonds showed a lack of trust, so he ceased purchasing them. Besides, the money saved helped Galetta meet his budget for the year.

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  • CreatedFebruary 20, 2015
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