Question
Seasonal Inc. is a business that provides cold beverages and ice cream during the summer months. The business normally operates with a manager and two
Seasonal Inc. is a business that provides cold beverages and ice cream during the summer months. The business normally operates with a manager and two employees during peak times. In non peak times, the business is run by a manager and an employee. The cash is counted by two employees on daily basis and reconciled to the tape from the cash register. Variances of greater than 3% are recorded and provided in a report to the owner of the business.
Deposits to the bank are made weekly by the manager. Employees and managers both handle cash throughout the day.
Last month, one of the employees was fired for giving out free ice cream to friends. It is not known how much free ice cream was given out prior to it being discovered by the external auditors during a routine count of inventory.
Required:
- Discuss 2 control strengths
- Discuss 2 control deficiencies
Control strengths or deficiencies may be evident from general controls, control objectives that may or may not exist or from the limitation of internal controls that are discussed in CAS 315.
Your answer should include the specific general control deficiency, control objective and/or the limitation of internal control.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started