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(solution) Identify internal control weaknesses in these processes


Gramiko, Inc., processes its sales and cash receipts documents in the following manner:CASH RECEIPTSEach morning a mail clerk in the sales department opens the mail containing checks and remittance advices, which are then forwarded to the sales department supervisor, who reviews each check and forwards the checks and remittance advices to the accounting department supervisor. The accounting department supervisor, who also functions as the credit manager, reviews all checks for payments of past-due accounts and then forwards the checks and remittance advices to the accounts receivable clerk, who arranges the advices in alphabetical order. The remittance advices are posted directly to the accounts receivable ledger. The checks are totaled, and the total is posted to the cash receipts journal. The remittance advices are filed chronologically.After receiving the cash from the preceding day"s cash sales, the accounts receivable clerk prepares a three-copy daily deposit slip. The third copy of the deposit slip is filed by date, and the second copy and the original accompany the bank deposit.SALESSales clerks prepare a three-copy sales invoice for each sale. The original and the second copy are presented to the cashier, while the third copy is retained by the sales clerk in the sales book. When the sale is paid for with cash, the customer pays the sales clerk, who presents the money to the cashier with the invoice copies.A credit sale is authorized by the cashier using an approved credit list after the sales clerk prepares the three-copy invoice. After receiving the cash or approving the invoice, the cashier validates the original copy of the sales invoice and gives it to the customer. At the end of each day the cashier recaps the sales and cash received and forwards the cash and the second copy of all sales invoices to the accounts receivable clerk. The accounts receivable clerk balances the cash received with cash sales invoices and prepares a daily sales summary. The credit sales invoices are posted to the accounts receivable ledger, and then all invoices are sent to the inventory control clerk in the sales department for posting to the inventory control catalog. After posting, the inventory control clerk files all invoices numerically. The accounts receivable clerk posts the daily sales summary to the cash receipts journal and sales journal and files the sales summaries by date.BANK DEPOSITSThe bank validates the deposit slip and returns the second copy to the accounting department, where the accounts receivable clerk files it by date. Monthly bank statements are reconciled promptly by the accounting department supervisor and filed by date.Required:Prepare a process map of these processes.Identify internal control weaknesses in these processes.

 


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