Internal Control Paper (need it by noon on tuesday April 12, 2005)

The following are the procedures for Accounts Payable for Jamona.com:

RECEIPT OF INVOICE FOR PAYMENT

Office Manager
-Receives invoice in mail
-Routes invoice to Accounts Payable

Accounts Payable
-Reviews invoice
-Codes for proper expense account
-Enters account payable into accounting system
-Prints check
-Signs check
-Mails check to vendor
-Files invoice

RECEIPT OF BANK STATEMENTS
Office Manager
-Receives bank statement, canceled checks
-Accounts for numerical sequence of checks
-Files checks in numerical sequence
-Routes bank statement to Accounts Payable

Accounts Payable
-Reconciles bank statement

Write a 3 page paper:
a. Assess the strengths and weaknesses of Jamona.com's internal controls
b. Recommend additional controls to cover the weaknesses
c. Discuss and identify all of the controls as preventive, detective, or corrective

Hi, 
The great and immediate shortcoming of the above is that there is no
control that the invoiced goods have been ordered and received, and
also that "accounts payable" reconciles the bank statement.  The
problem is probably from a rather old source in that it suggests that
the bank checks will be returned with the bank statements.

I would suggest making a flow chart of the the whole process, and then
a second one that starts with accounting for goods ordered and shows
separation of responsibilities to assure that no check can be signed
and mailed without independent control, and that no bank debit is
controlled by anyone who could authorized issuance of a check.  (The
above points are not the only shortcomings.)