The following control procedures are used in Keaton Company for over-the-counter cash receipts.

(a) For each procedure, explain the weakness in internal control and identify the control principle that is violated.

1-

Each store manager is responsible for interviewing applicants for cashier jobs. They are hired if they seem honest and trustworthy.

Select a weakness in internal control

Select a control principle that is violated

2.

All over-the-counter receipts are registered by three clerks who share a cash register with a single cash drawer.

Select a weakness in internal control

Select a control principle that is violated

3.

To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked briefcase in the stock room until it is deposited in the bank.

Select a weakness in internal control

Select a control principle that is violated

4.

At the end of each day, the total receipts are counted by the cashier on duty and reconciled to the cash register total.

Select a weakness in internal control

Select a control principle that is violated

5.

The company accountant makes the bank deposit and then records the day's receipts.

Select a weakness in internal control

Select a control principle that is violated

Options are:

*Weakness*

-Cash is not adequately protected from theft

-Cashiers are not bonded and background checks are not conducted

-Inability to establish responsibulty for cash on a specific clerk

-Cash is not independently counted

-The account should not handle cash

*Principle Violated*

-Human Resources controls

-Physical Controls

-Documentation procedures

-Establishment of responsibility

-Segregation of duties

-Independent internal Verification