lesk. Sales8.Control WeaknessesFor the past 11 years, Elaine Wright has been an

Question

lesk. Sales8.Control WeaknessesFor the past 11 years, Elaine Wright has been an employee of the Star-Bright ElectricalSupply store. Elaine is a very diligent employee who rarely calls in sick and takes her vacation days staggered throughout the year so that no oneelse gets bogged down with her tasks for more than one day. Star-Bright is a small store that employs only four people other than the owner. Theowner and one of the employees help customers with their electrical needs. One of the employees handles all receiving, stocking, and shipping ofmerchandise. Another employee handles the purchasing, payroll, general ledger, inventory, and accounts payable functions. Elaine handles all ofthe point-of-sale cash receipts and prepares the daily deposits for the business. Furthermore, Elaine opens the mail and deposits all cash receipts(about 30 percent of the total daily cash receipts). Elaine also keeps the AR records and bills the customers who purchase on credit.

point out any control weaknesses you see in the scenario. lost some recommendations. (no additional employees can be hired)

Explanation / Answer

Maker-checker (or Maker and Checker, or 4-Eyes) is one of the central principles of authorization in the information systems of financial organizations.The principle of maker and checker means that for each transaction, there must be at least two individuals necessary for its completion. While one individual may create a transaction, the other individual should be involved in confirmation/authorization of the same. Here the segregation of duties plays an important role. In this way, strict control is kept over system software and data, keeping in mind functional division of labor between all classes of employees.

Also, there must not be a lot of responsibilities in one hand.

In the given question,a lot of responsibilties lie in the hands of Elaine.She/He may be a trusted employee but when a lot of responsibilties lie in one hand,the chances of fraud increases.Hence this is the weakness in internal weakness.

The suggestion for the same can be distributing some of the responsibilties given to Elaine to some other employee since no new employees can be hired.

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