Henry Mills is responsible for preparing checks, recording cash disbursements, and preparing bank reconciliations for Signet Corporation. While reconciling the October bank statements, Mills notices that several checks totaling $937 had been outstanding for more than one year. Concluding that these checks would never be presented for payments. Mills prepared a check for the $937 payable to himself, forged the treasure's signature and cashed the check. Mills made no entry in the accounts for this disbursement and attempted to conceal the theft by destroying the forged check and omitting the long-outstanding checks from subsequent bank reconciliations.

1. Identify the weakness in Signet Corporations internal control.

Explain several audit procedures that might disclose the fraudulent disbursement.