Reference no: EM133360180

Gordon's Windows Company is a window cleaning company in which customers' windows are cleaned monthly, the window cleaner then posts a stamped addressed envelope for payment through the customer's front door. Gordon's Windows Company has a large number of receivable balances, and these customers pay by cheque or cash, which is received in the stamped addressed envelopes in the post. The following procedures are applied to the cash received cycle:

 1. A junior clerk from the accounts department opens the post and if any cheques or cash have been sent, she records the receipts in the cash received log and then places all the monies into the locked small cash box. 

2. The contents of the cash box are counted each day and every few days these sums are banked by whichever member of the finance team is available.

 3. The cashier records the details of the cash received log into the cash receipts daybook and also updates the sales ledger. 

4. Usually on a monthly basis the cashier performs a bank reconciliation, which he then files, if he misses a month then he catches this up in the following month's reconciliation. 

For the cash cycle of Gordon's Windows Company: 

(i) Identify and explain THREE deficiencies in the system

 (ii) Suggest controls to address each of these deficiencies

(iii) List tests of controls the auditor of Gordon's Windows Company would perform to assess if the controls are operating effectively.