Italian Imports buys furniture and dcor items from Italy and sells them to retailers. Amelia Rossi is

Italian Imports buys furniture and décor items from Italy and sells them to retailers. Amelia Rossi is the general manager of the company. Rossi employs two other people in the business. Marcia Moretti serves as the buyer for the company. Moretti travels throughout Italy to find interesting new products. When Moretti finds a new product, she arranges for Italian Imports to purchase and pay for the item. She helps the artisans prepare their invoices and then faxes the invoices to Rossi in the company office.

Rossi operates out of an office in Boston, Massachusetts. The office is managed by Alexa DeLuca, who handles the mail, keeps the accounting records, makes bank deposits, and prepares the monthly bank reconciliation. Virtually all of the company’s cash receipts arrive by mail—from sales made to Target, Pier 1 Imports, and specialty shops. DeLuca also prepares checks for payment based on invoices that come in from the suppliers that have been contacted by Moretti. To maintain control over cash payments, Rossi examines the paperwork and signs all checks.

Requirement

Identify all the major internal control weaknesses in Italian Imports’ system and explain how they could hurt the company. Also state how to correct each weakness.