Question

A company receives numerous cheques in the mail every day. Which of the following demonstrates a weak internal control procedure for this company?

A) Allowing multiple employees to open and handle the incoming mail without segregation of duties.
B) Requiring all employees to sign for and collect their own paychecks.
C) Depositing all received cheques into a single bank account without reconciliation.
D) Implementing a secure system where only authorized personnel can access the mailroom.

Answer 1

A weak internal control procedure for a company receiving cheques in the mail would include allowing multiple employees to handle mail without segregation of duties, requiring employees to collect their own paychecks, and depositing cheques without reconciliation.

Step-by-step explanation:

A weak internal control procedure for a company that receives numerous cheques in the mail every day would be allowing multiple employees to open and handle the incoming mail without segregation of duties. This means that there is no clear division of responsibilities, which increases the risk of errors, fraud, or misuse of funds.

Another weak internal control procedure would be requiring all employees to sign for and collect their own paychecks. This lack of segregation of duties can make it easier for employees to manipulate or steal checks, resulting in potential financial losses for the company.

Additionally, depositing all received cheques into a single bank account without reconciliation is a weak internal control procedure. Reconciliation is crucial to ensure that all cheques received are properly recorded, preventing errors and detecting any discrepancies or missing payments.