Identify the internal control principle that is violated

The following internal control procedures are used in Erin’s Coffee House for cash disbursements.

1. The company accountant prepares the bank reconciliation and reports any discrepancies to the owner.

2. The store manager personally approves all payments before signing and issuing checks.

3. Each week, Erin leaves 100 company checks in an unmarked envelope on a shelf behind the cash register.

4. After payment, bills are filed in a paid invoice folder.

5. The company checks are unnumbered.

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

(b) For each weakness, suggest a change in the procedure that will result in good internal control.


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