Natalie is struggling to keep up with the recording of her accounting transactions. She is spending a lot of time marketing and selling mixers and giving her cookie classes. Her friend John is an accounting student who runs his own accounting service. He has asked Natalie if she would like to have him do her accounting.

John and Natalie meet and discuss her business. John suggests that he do the following for Natalie.

6.  Transfer all of Natalie's manual accounting records to his computer accounting program. John maintains all of the accounting information that he keeps for his clients on his laptop computer.

7.  Prepare monthly financial statements for Natalie to review.

8.  Write himself a check every month for the work he has done for Natalie.

Instructions

1-    Identify the weaknesses in internal control that you see in the system that John is recommending. (Consider the principles of internal control identified in the chapter.) NOTE: Be specific and address the 8 issues presented.

2-    Suggest any improvements to the Internal Controls if John is hired to do Natalie's accounting? Specifically address the weaknesses identified.