Expands on: E7-1

LO: 1

Stefan Pagnucci is the owner of Pagnuccis Pizza. Pagnuccis is operated strictly on a carry-out basis. Customers pick up their orders at a counter where a clerk exchanges the pizza for cash. While at the counter, the customer can see other employees making the pizzas and the large ovens in which the pizzas are baked.

Instructions:

(a) Identify the six principles of internal control and give an example of each principle that you might observe when picking up your pizza. (Note: It may not be possible to observe all the principles.)

(b) What other internal controls would you recommend for Pagnuccis Pizza?