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Problem # 1 (30%) The following describes the cash receipts procedures for a medium-sized online and catalogue-based retailer. Customer payments come directly to the general mail room along with other mail items. The customer payments mail constitutes about 20 percent of the total mail received each day. The mailroom clerks sort through the mail, open the customer payment envelopes, remove the customer checks and remittance advices, and reconcile the two documents. The mail- room supervisor then sends the reconciled checks and remittance advices to the AR clerk, who posts the amounts received to the customer AR subsidiary ledger and the cash receipts journal from her computer terminal. The AR clerk then manually prepares a remittance list of all checks received, endorses the checks "for deposit only" and sends the checks and remittance list to the Treasurer. Finally, the clerk files the remittance advices in the AR department. Once the checks and remittance list arrive at the Treasury department, the treasurer reconciles the documents, and manually prepares three hard copies of the deposit slip. Next, he sends the checks and two copies of the deposit slip to the bank. Finally, he files the third copy of the deposit slip and the remittance in the department.

a. Identify the internal control weaknesses in the cash receipts process.

b. For each weakness, describe the associated risks. c. For each weakness provides a possible control activity.

Problem # 2 (20%) Which, if any, of the following situations represent improper segregation of functions?

A. The billing department prepares the customers 'invoices, and the AR department posts to the customers' accounts. B The sales department approves sales credit memos as the result of product returns, and subsequent adjustments to the customer accounts are performed by the AR department. C The shipping department ships goods that have been retrieved from stock by warehouse personnel. D. The general accounting department posts to the general ledger accounts after receiving journal vouchers that are prepared by the billing department.

Problem # 3 (20%) Listed here are two scenarios. For each scenario, discuss the possible damages that can occur. Suggest a preventive control.

A. An intruder taps into a telecommunications device and retrieves the identifying codes and personal identification numbers for ATM cardholders. (The user subsequently codes this information onto a magnetic coding device and places this strip on a blank bank card.)

B. Because of occasional noise on a transmission line, electronic messages received are extremely garbled.

Problem # 4 (30%) The headquarters of Hill Crest Corporation, a private company with $15.5 million in annual sales, is located in California. Hill Crest provides for its 150 clients an online legal software service that includes data storage and administrative activities for law offices. The company has grown rapidly since its inception three years ago, and its data processing department has expanded to accommodate this growth. Because Hill Crest's president and sales personnel spend a great deal of time out of the office developing new clients, the planning of the IT facilities has been left to the data processing professionals. Hill Crest recently moved its headquarters into are modeled warehouse on the outskirts of the city. While remodeling the warehouse, the architects retained much of the original structure, including the wooden-shingled exterior and exposed wooden beams throughout the interior. The distributive processing computers and servers are situated in a large open area with high ceilings and skylights. The open-ness makes the data center accessible to the rest of the staff and promotes a team approach to problem solving. Before occupying the new facility, city inspectors declared the building safe; that is, it had adequate fire extinguishers, sufficient exits, and so on. In an effort to provide further protection for its large database of client information, Hill Crest instituted a tape backup procedure that automatically backs up the database every Sunday evening, avoiding interruption in the daily operations and procedures. All tapes are then labeled and carefully stored on shelves reserved for this purpose in the data processing department. The departmental operator's manual has instructions on how to use these tapes to restore the database, should the need arise. A list of home phone numbers of the individuals in the data processing department is avail-able in case of an emergency. Hill Crest has recently increased its liability insurance for data loss from$50,000 to $100,000.This past Saturday, the Hill Crest headquarters building was completely ruined by fire, and the company must now inform its clients that all of their information has been destroyed.

A. Describe the computer security weaknesses present at Hill Crest Corporation that made it possible for a disastrous data loss.

B. List the components that should have been included in the disaster recovery plan at Hill Crest Corporation to ensure computer recovery within 72 hours.

C. What factors, other than those included in the plan itself, should a company consider when formulating a disaster recovery plan?

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Please note: NO AI and plagirsm please.******** PLEASE WRITE IN YOUR WORDS