Homework Week 5 Chapter 07 exercises Score 0 of 1 pt 6 of 7

Homework: Week 5 -Chapter 07 exercises Score: 0 of 1 pt 6 of 7 (4 complete) HW Score: 53 84%, 3.77 E8-14 (book/static) EQuestion Help Gary\'s Great Cars purchases high-performance auto parts from a Nebraska vendor. Dave Simon, the accountant for Gary\'s, verfies receipt of merchandise and prepares, signs, and mails the check to the vendor Requirements 1. Identify the internal control weakness over cash payments. 2. What could the business do to correct the weakness? Requirement 1. Identify the internal control weakness over cash payments The following are the weaknesses in internal control. (Only complete the necessary answer boxes)

Solution

ANSWER:

Lacks segregation of duties: The responsibility for the verification of the receipt of merchandise, payment authorization and preparing payment is been provided to the same person.

Employee background checks: The Company did not perform background check of the accountant which is an effective tool to implement internal controls, ensuring the company acts in an ethical manner