Mabuhay Company makes custom urns for the different funeral parlors in Metro Manila. With the pandemic in 2020 and continuing with a 2nd and 3rd wave in 2021, demand had spiked up. The manufacturing supervisor, Ms. Reyes interviews people who have specialized manufacturing skills, and informs payroll when an employee is hired by submitting to them an interview sheet with her signature on it. Payroll then prepares an appointment paper for the hired employees with a rate indicated by Ms. Reyes on the interview sheet. Once required documents for new hires are complete and an ID is issued to the employee, the newly hired employee shows the ID and requests for a blank time card from the security guard at the gate.

The time card is then punched in a bundy clock situated beside the water fountain in the cafeteria. The employees are also required to keep a record of the time they spend working on each batch of urns assigned to them using a job ticket. At the payroll cut off, time cards are submitted to Ms. Reyes who approves the time cards and job tickets of all 200 production workers. The general accountant analyzes the job tickets and prepares a labor distribution summary and records all entries related to product costs. Payroll department prepares the payroll register based on the time cards and the rates written on the appointment papers per employee.

The payroll register is submitted to Ms. Reyes for cross checking. If approved, a Payroll clerk prepares a withdrawal slip which is given to the messenger who in turn withdraws the money from the bank. Payroll also prepares the journal voucher to record the expense and liability arising from the payroll. The withdrawn money is turned over by the messenger to the cashier, Mr. Cruz, who places the money in the companys cash register and distributes the money based on a copy of the payroll register given to him. He tickmarks the employees name on the payroll register once an employee receives his pay.

At the end of the day, Mr. Cruz creates a journal voucher using the total amounts indicated in the payroll register. The general accountant receives both journal vouchers and records them in the general ledger. Requirement: Identify at least five (5) internal control weaknesses and explain the reason why these are considered weaknesses (15 pts). For each weakness identified, cite recommendations to remove such weakness. (15 pts.)