Reference no: EM132819592

You were assigned to assess the internal control structure of PETIKS Company and you have noted the following observations in their Accounting Department-Disbursements Section:

a. Ms. Ganda is the Accounting In-Charge for receiving request for cash advances from employees. She requires the Requestor to fill-out a Request for Cash Advance form. Upon receipt of the form, she records request in her monitoring schedule and directly hands it to Check Processor without verifying validity.

b. Check Disbursement Voucher Processor directly prepares the CDV for request forwarded to her and forwards prepared CDV to the Accounting Manager for signature.

c. After signing prepared CDV, Accounting Manager forwards it to the Treasurer for her signature and check preparation. CDV with attached check is then returned to Ms. Ganda.

d. Ms. Ganda advises Requestor of the check availability and releases the same.

Required:

Problem a. Identify weaknesses in the internal control of Petiks Company and state risk involved. Please give at least 3 internal control weaknesses and at least 1 risk for each weakness

Problem b. Propose at least 1 internal control policy to counter the risk identified.