In Each of the Following Situations, Identify the Internal Control

question 156

Essay

In each of the following situations, identify the internal control weakness as well as the business's potential problem, and suggest a solution.
a)The law firm of Douglas and Gere has been extremely busy in recent months. It needs another lawyer, but has not had the chance to hire one. In the meantime, one of the secretaries has been preparing briefs, writing up wills, and preparing the closing papers for various real estate deals.
b)Tobey Smith, an accounting clerk, is responsible for opening the mail, recording and depositing cash receipts, as well as preparing the monthly bank reconciliation. Tobey has not taken a vacation in over five years.
c)Carole Tobias purchases supplies for Darcey Company and stores them in a locked room for which she has the key. She is also responsible for distributing these supplies to employees upon request. At the end of each month, Carole takes an inventory of the supplies on hand and notifies the accounting department of the amount of the adjusting entry for supplies used.

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Definitions:

Online Consumers

Individuals or entities that purchase goods or services via the internet.

Workday Shopping

The activity of purchasing goods or services during the working hours of a typical business day.

Showrooming

The practice of examining merchandise in a traditional brick-and-mortar retail store without purchasing it, then shopping online to find a lower price for the same item.

Online Promotions

Marketing activities conducted via the internet, including social media advertising, email marketing, and search engine marketing, aimed at increasing brand visibility and sales.