Question

A company employs three accounts payable clerks and one treasurer. Their responsibilities are as follows:

Employee Responsibility
Clerk 1 Reviews vendor invoices for proper signature approval
Clerk 2 Enters vendor invoices into the accounting system and verifies payment terms
Clerk 3 Posts entered vendor invoices to the accounts payable ledger for payment and mails checks
Treasurer Reviews the vendor invoices and signs each check

Which of the following would indicate a weakness in the company's internal control?
a. Clerk 1 opens all of the incoming mail
b. Clerk 3 mails the checks and remittances after they have been signed
c. Clerk 2 reconciles the accounts payable ledger with the general ledger monthly
d. The treasurer uses a stamp for signing checks

Answer 1

The correct answer is B

Step-by-step explanation:

Internal control is the control, procedures and rules which are executed by the company that ensures the integrity of the accounting as well as the financial information so that could promote accountability and help in preventing the fraud.

So, the one which weakness the internal control of the company is the Clerk 3, checks the mails and then remittances are signed. The Clerk 3 has the responsibility of record keeping. Therefore, giving a signed check to Clerk 3 states that the clerk have the access to an asset which violates the separation of duties.