Anna is the owner of Wise Choice, a secondhand branded ladies’ bags company.
As the business is small, there are only four employees at the company: Michelle, Sam, Simon, and Amy. The following situations describe the internal control weakness at the company:

a. Michelle is the only purchaser at the company. Michelle deals with potential sellers who wish to sell their bags, approve invoices for payment, and signs the checks.
No supervisor reviews her work.

b. Anna decided that one way to cut cost in the upcoming year was to remove the external auditor. She believes that the four employees are honest and sincere and they won’t commit any wrongdoing.

c. Amy is the only employee working at the office. Amy has been working at Wise Choice for 12 years and is familiar with the businesses. She performs all accounting duties, including opening the mail, receiving checks, and preparing the bank deposit.

d. In order to reduce operation expenses, Anna has decided to terminate the use of security cameras at the company. Hence, no cameras monitor the cash register.

e. The company keeps a small petty cash fund to handle small cash transactions. As the team is small, Anna has decided that all four of them will have access to the petty cash fund. The employees submit a ticket each time they access the petty cash fund to keep a record.

Requirements 

1. Identify the missing internal control characteristics in each situation at Wise Choice.
2. Identify the possible problem caused by each control weakness found in Requirement 1.
3. Propose a solution to each internal control problem found in Requirement 2.