The following control procedures are used in Kelton Company for over-the-counter cash receipts.
(a) For each procedure, explain the weakness in internal control and identify the control principle that is violated.
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Procedure |
Weakness |
Principle Violated |
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| 1. | Each store manager is responsible for interviewing applicants for cashier jobs. They are hired if they seem honest and trustworthy. |  |
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| 2. | All over-the-counter receipts are registered by three clerks who share a cash register with a single cash drawer. | |
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| 3. | To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked attaché case in the stock room until it is deposited in the bank. | |
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| 4. | At the end of each day the total receipts are counted by the cashier on duty and reconciled to the cash register total. | |
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| 5. | The company accountant makes the bank deposit and then records the day’s receipts. | |
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