Your friend, James, has hired you to evaluate the following internal control procedures.
Explain to your friend whether each of the numbered items below is an internal control strength or weakness. You must also state which internal control procedure relates to each of the internal controls.
For the weaknesses, you also need to state a recommendation for improvement.
(1) Background checks are required.
(2) Paychecks are stored in an unlocked safe.
(3) The Treasurer signs all checks.
(4) The accountant counts the cash and makes the bank deposit.
(5) The company utilizes internal and external auditors.