The Following Ten Paragraphs Describe Control Weaknesses in Customer Order

The following ten paragraphs describe control weaknesses in customer order and account management business processes.Listed below are ten controls that may help regulate the weaknesses:
A.Separation of payroll and personnel departments
B.Independent paymaster to distribute paychecks
C.Imprest payroll bank account
D.Vendor selected by purchasing department
E.Timekeeping department reconciles time cards to job time summaries
F.Requisition form prepared by requestor
G.Receiving report signed by stores
H.Vendor list approved independent of purchasing
I.Purchase order copy sent to accounts payable
J.Receiving report copy sent to accounts payable
Required: In the blank next to each number,list one capital letter representing the best control to address the system weakness.You will use each letter only once.
1.________ Rattlesnake Wire Company's purchasing manager selected his brother-in-law as a vendor and received a kickback for providing the business.
2.________ Blazing Saddles Corporation ordered goods that receiving personnel stole.Receiving prepared a receiving report and sent it to accounts payable.The company unknowingly paid for the stolen goods.
3.________ The production manager at Ghost Manufacturing Company told the payroll department he had hired a new employee.On payday,the paymaster could not find the employee and upon investigation,found that the employee did not exist.
4.________ Price Company's purchasing department ordered goods requested by the maintenance department by phone.When the goods arrived,the maintenance department claimed that the goods were of such poor quality they could not be used.
5.________ Connecticut Yankee Manufacturing Company ordered goods that were never received.The company,as a matter of standard policy,paid the invoice.
6.________ Southern Star Manufacturing Company's payroll department routinely distributed paychecks on payday.The payroll supervisor suddenly quit her job.On the next payday,the payroll department could not find employees to claim two paychecks.
7.________ Panhandle Products Company cannot easily identify vendors,and consistently selects vendors whose goods are overpriced and whose delivery schedules are too slow for Panhandle's needs.
8.________ Lone Star Production Company received goods that were never ordered.The company paid the invoice.
9.________ Half Moon Manufacturing Company's production manager is unsure that the second shift employees are working all hours reported on the job time tickets.
10.________ The internal auditor of Eastern Overboard Company prepares the bank reconciliation.He has difficulty managing the large number of outstanding checks at month-end in the bank reconciliation.Most of the outstanding checks are employee paychecks.

Correct Answer:

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1.H,2.G,3....

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