Chapter 7 Hand-out Assignment Question 1 The following internal control procedures are used by Red Company for cash receipts and disbursements: 1. Cashiers receive all over-the-counter receipts and place the cash into a single cash drawer. 2. When cash in the drawer exceeds $500, it is placed in an envelope marked "cash" and stored in a drawer in the supervisor's office. 3. The company's accountant makes daily bank deposits. 4. The clerk in the receiving department authorizes all payments for purchases. 5. Blank cheques are kept in the main office. 6. The company's internal auditor prepares bank reconciliations annually. Instructions For each of the above procedures, explain the weakness in internal control, identify the control policy or procedure violated, and suggest a change in procedure that will result in better control