The following control procedures are used in Morgan’s Boutique Shoppe for cash Identify internal control disbursements. weaknesses over cash disbursements and suggest improvements.

(LO 2, 4)

1. The company accountant prepares the bank reconciliation and reports any discrepancies to the owner.

2. The store manager personally approves all payments before signing and issuing checks.

3. Each week, 100 company checks are left in an unmarked envelope on a shelf behind the cash register.

4. After payment, bills are filed in a paid invoice folder.

5. The company checks are unnumbered.

Instructions

(a) For each procedure, explain the weakness in internal control, and identify the internal control principle that is violated.

(b) For each weakness, suggest a change in the procedure that will result in good internal control.