Following are five separate cases involving internal control issues. Required: 1. For each case, identify the principle(s) of internal control that is violated. Marker Theater has a computerized order-taking system for its tickets. The system is backed up once a year. a. b. Sutton Company has two employees handling acquisitions of inventory. One employee places purchase orders and pays vendors. The second employee receives the merchandise. C. To ensure the company retreat would not be cut, the manager of Lavina Company decided to save money by canceling the external audit of internal controls. d. Tywin company keeps very poor records of its equipment. Instead, the company asserts its employees are honest and would never steal from the company. The owner of Super Pharmacy uses a check software/printer to prepare checks, making it difficult for e. anyone to alter the amount of a check. The check software/printer, which is not password protected, is on the owner's desk in an office that contains company checks and is normally unlocked.

Which, if any, of the following situations represent improper segregation of functions?a. The billing department prepares the customers’ invoices, and the accounts receivable department posts to the customers’ accounts.b. The sales department approves sales credit memos as the result of product returns, and subsequent adjustments to the customer accounts are performed by the accounts receivable department.c. The shipping department ships goods that have been retrieved from stock by warehouse personnel.d. The general accounting department posts to the general ledger accounts after receiving journal vouchers that are prepared by the billing department.

Below are several scenarios related to control activities of a company.1. A manufacturing company compares total sales in the current year to those in the previous year but does not compare the cost of production.2. So that employees can have easy access to office supplies, a company keeps supplies in unlocked cabinets in multiple locations.3. At the end of each day, a single employee collects all cash received from customers, records the total, and makes the deposit at the bank.4. At the end of the year only, the company compares its cash records to the bank’s records of cash deposited and withdrawn during the year.5. A company encourages employees to call an anonymous hotline if they believe other employees are circumventing internal control features.6. All employees have the authority to refund a customer’s money.Required:For each scenario, determine which control activity is violated. Control activities include separation of duties, physical controls, proper authorization, employee…

Select Effective Extended Procedures. The following are some “suspicions”; you have been requested to select some effective extended procedures designed to confirm or deny the suspicions.Required:Write the suggested procedures for each case in definite terms so another person can know what to do.a. The custodian of the petty cash fund may be removing cash on Friday afternoon to pay for weekend activities.b. A manager noticed that eight new vendors were added to the purchasing department’s approved vendor list after the assistant purchasing agent was promoted to chief agent three weeks ago. She suspects all or some of them might be fictitious companies set up by the new chief purchasing agent.c. The payroll supervisor may be stealing unclaimed paychecks of employees who resigned and did not collect their last check.d. Although no customers have complained, cash collections on accounts receivable have decreased, and the counter clerks may have stolen customers’ payments.e. The cashier…