Question1)
You are an accountant at the local CPA firm that is auditing the accounting records of ABC Company. You have been asked to educate accounting department about limitations of the internal control system in preparation for upcoming audit. During your audit, you have identified that because of a weak internal control system, an adjusting entry for prepaid insurance was not recorded for first 3 months of year at $500 per month. Identify limitations of the internal control system. Give at least 3 limitations. Provide at least 2 examples of internal control procedures, and describe how these procedures could be implemented. Identify symptoms of the lack of internal control. Describe the impact of missing journal entry on financial statements of company.
Length: 3 to 4 pages