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At Hutchingson Company, checks are prenumbered and the treasurer are authorized to issue checks. Each...

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Accounting

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At Hutchingson Company, checks are prenumbered and the treasurer are authorized to issue checks. Each signer has access to unissued checks kept in an unlocked file cabinet. The purchasing agent pays all bills pertaining to goods purchased for resale. Prior to payment, the purchasing agent determines that the goods have been received and verifies the mathematical accuracy of the vendor's invoice. After payment, the invoice is filed by the vendor, and the purchasing agent records the payment in the cash disbursements journal. The treasurer pays all other bills following approval by authorized employees. After payment, the treasurer stamps all bills PAID, files them by payment date, and records the checks in the cash disbursements journal. Hutchingson Company maintains one checking account that is reconciled by the treasurer Identify two internal control problems in the paragraph above and discuss for each one: What control activity is being violated? How could this allow an opportunity for fraud? What should they do correct the

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