Internal Control Weakness and Corrective Actions Essay Example

in addition can make finding out a problem with the cash receipts harder when not processed on a daily basis.

The corrective action would be for the cash receipts and cash to be counted daily and deposited into Fan Company A’s bank account. The fourth internal control weakness is that the accountant was the only person handling the cash receipts and making the weekly deposits. The corrective action would be for the duties to be split between two individuals with one person handling the cash and the other person doing the bookkeeping of the cash. This will decrease the chance of theft in the office.

The fifth internal control weakness that I found was that the afternoon shift employee summarized the day’s receipts and printed off the daily cash and credit sales tallies. The corrective action that should be taken here is for the employee to count their draw at the end of their shift but the employee should not have access to the accounting records. This should be handled by another employee. The sixth internal control weakness that I found was that the accountant was overseeing the retail outlet by him/herself.

The corrective action would be for more than one person to oversee the retail outlet to perform different duties including placing orders, receiving product, and paying vendors. Having separation of duties lessens the chance of theft and errors. The seventh internal control weakness that I found was that inventory was not done on a regular basis. The last inventory was completed by the store employees six months ago. The corrective action that I found was that for the inventory to be counted daily or weekly to

help keep all supplies and product needed on hand.

This will also decrease the chance of theft of product or loss of product if kept track of more closely. The eighth internal control weakness that I found was that the product has a bar code but the partners did not purchase a bar code scanner. The corrective action would be to purchase the bar code scanner to keep track of the companies’ merchandise. This will allow for the company to order only when necessary and to reduce theft and loss of product. The bar code scanner will also cut back on the amount of time needed to take inventory allowing for inventory count more often and efficiently.