Required

For each of the two independent situations, identify two control weaknesses, and explain the implications of these weaknesses for the companys accounting records. (4 marks for each situation). Prepare your answer in the following format:

Internal Control Weakness	Implication for Companys Accounting Records
(Example only no marks) The store does not use serially pre-numbered sales invoices.	Sales invoices could be lost or omitted and sales would be understated.
(Example only no marks) Employees are not bonded.	No implication for companys records (implication for risk of loss)

Situation 2 Occasionally, the plant manager for a paper products manufacturer makes a deal with a supplier, presumably to get a good discount, and instructs the accounting staff to prepare a cheque in a hurry without the normal purchase order documentation that is supposed to be attached to the cheque stub. This allows the plant to have a just-in-time system for purchasing when a bargain is available from a supplier. Unfortunately, this also means that the regular purchase order may not be prepared and sent to the shipper/receiver in time for the goods, so the accounting department has to manually prepare a receivers memo with the information that is normally on a regular purchase order (e.g., description of goods, suppliers name, quantity purchased) to let the shipper/receiver know that goods will be arriving for which the regular documentation may not be ready in time.