DC 13-3 Croyden Factory Inc., Evaluation of Flowchart for Payroll Control Weaknesses. LO5, 6 APAs audit working papers contain a narrative description of a segment of the Croyden Factory Inc. payroll system and an accompanying flow-chart (Exhibit DC 13-3) as follows:

The internal control system, with respect to the personnel department, is well functioning and is not included in the accompanying flowchart. At the beginning of each workweek, payroll clerk No. 1 reviews the payroll department files to determine the employment status of factory employees. Clerk No. 1 then prepares time cards and distributes them as each individual arrives at work. This payroll clerk, who is also responsible for the custody of the cheque signature stamp machine, verifies the identity of each payee before delivering signed cheques to the supervisor.

At the end of each workweek, the supervisor distributes payroll cheques for the preceding workweek. Concurrent with this activity, the supervisor reviews the current weeks employee time cards, notes the regular and overtime hours worked on a summary form, and initials the time cards. The supervisor then delivers all time cards and unclaimed payroll cheques to payroll clerk No. 2.

Required: a. Based on the narrative and accompanying flowchart, what are the weaknesses in the system of internal control? b. Based on the narrative and accompanying flowchart, what inquiries should be made with respect to clarifying the existence of possible additional weaknesses in the system of internal control?

Note: Do not discuss the internal control system of the personnel department