Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

High-Tech Inc. commenced operations recently. Two friends from university, John Deol and Rehana Gerdman, jointly own the company's shares. John and Rehana have developed a

High-Tech Inc. commenced operations recently. Two friends from university, John Deol and Rehana Gerdman, jointly own the company's shares. John and Rehana have developed a new software application to track shipping. The two friends spend most of their time on the development of new products and the marketing of the current product. John and Rehana hired Fred Glass to be High-Tech's controller. Fred has been given overall responsibility for the books and records of High-Tech so that John and Rehana can spend their time on development and marketing. Fred has one assistant, Asmaa. Both Fred and Asmaa have the authority to order goods for High Tech. Asmaa can approve invoices for payment up to $5,000. Fred can approve any invoice for payment. Fred, John, and Rehana are all signing officers on the company's bank account. Only one of the three signing officers needs to sign a cheque under $20,000. For cheques greater than $20,000, two signing officers must sign. Unsigned cheques are kept in the company safe. Fred is responsible for preparing the monthly bank reconciliations and making any necessary journal entries.

Requirements:

Identify three control weaknesses over the cash payments and the problems that could occur as a result of these weaknesses. List the improvements in control activities that High-Tech should consider. (There are lots of weaknesses, you just need to limit your answer to three major weaknesses.)

1.Control weakness #1 identification, explanation as to why it is a weakness, and an improvement

that should be implemented to remove the weakness.

2.Control weakness #2identification, explanation as to why it is a weakness, and an improvement

that should be implemented to remove the weakness.

3.Control weakness #3 identification, explanation as to why it is a weakness, and an improvement

that should be implemented to remove the weakness

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Theory And Analysis Text And Cases

Authors: Richard G Schroeder, Myrtle W Clark, Jack M Cathey

13th Edition

1119577772, 9781119577775

More Books

Students also viewed these Accounting questions

Question

What a re va lues? (p. 5 2)

Answered: 1 week ago

Question

1. Maintain my own perspective and my opinions

Answered: 1 week ago