In the Ethiopian Metal works company all disbursements for amounts over Birr 50 are made by cheque.
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Question:
- In the Ethiopian Metal works company all disbursements for amounts over Birr 50 are made by cheque. Each cheque on general cash requires the signature of Ato Samuel, Treasurer, plus counter signature of either Ato Fekade, president, or Ato Leikun, vice president. As latter two cheque signatories do considerable traveling, they frequently sign blank cheque when they expect to be away for a few days and leave them with Ato Samuel to be used as needed. Before signing a cheque, each of these three is supposed to examine carefully the voucher to be paid, which is always accompanied by the voucher’s invoice approved for price, quantity, and extension, receiving report, and a copy of the purchase order, all properly approved and initialed. Each of the cheque signers is very conscious of the importance of internal control and assures you he does examine vouchers very carefully before signing cheques.
Instruction:
- Describe briefly the most outstanding weakness you note in the internal control as described above, and outline the improvements you suggest to strengthen system.
Related Book For
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward
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