Week 5 Chapter 7 Post

Week 5 Chapter 7 Post - 1. Identify the missing internal...

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1. Identify the missing internal control characteristics in each situation 2. Identify the possible problem caused by each control weakness 3. Propose a solution to each internal control problem a) Rite-Way Applications sells accounting software. Recently, development of a new program stopped while the programmers redesigned Rite-Way’ accounting system. Rite- Way’s accountants could have performed this task. I would say the missing internal control characteristics in this situation would be monitoring of controls and Control procedures. The possible problem with the lack of monitoring of controls would be that without auditors the employees could create any system they wanted. Meaning that they would know the ins and outs of the system and would be able to manipulate whatever information they wanted to. The problem caused by lack of control procedures is that there is no separation of duties. Neither the programmers, nor the accountants should have control over designing the companies accounting software so that there won’t be any chance the system can be manipulated. A solution would be to keep all jobs separate and to have an outside party create or audit the accounting software. b) Betty Grable has been your trusted employee for 30 years. She performs all cash handling and accounting duties. Ms. Grable just purchased a new Lexus and a new home in an expensive suburb. As owner of the company, you wonder how
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Week 5 Chapter 7 Post - 1. Identify the missing internal...

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