Describe the errors, irregularities, or misstatements that could occur due to the weaknesses indicated by the lack of controls.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Assumes that when conducting procedures to obtain an understanding of the control structure in the Fiona Company, you checked “NO” to the following internal control questionnaire items:

 

  • Does access to on-line files requires specific passwords to be entered to identify and validate the terminal user?
  • Are control totals established by the user prior to submitting data for processing? (order entry application subsystem).
  • Are input control totals reconciled to output control totals? (Order entry application sub system).

 

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Describe the errors, irregularities, or misstatements that could occur due to the weaknesses indicated by the lack of controls.

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