Fran Jones is the petty-cash custodian. Fran approves all requests for payment out of the $200 fund, which is replenished at the end of each month. At the end of each month, Fran submits a list of all accounts and amounts charged, and a check is written to her for the total amount. Fran is the only person ever to tally the fund.

Required: Write a detailed memo to your instructor:

1. Indicating the apparent internal control weakness in the procedure described above.

2. Suggesting alternative procedures to eliminate the weaknesses.

3. Explaining two administrative, two preventive, and two detective controls a company may institute over cash. Please be specific.

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Answer rating: 100% (QA)

1 From the details it may be assumed that flow of cash do not bear any control other than the limit of imprest specified Therefore it is brought to th... View the full answer