Answered: Discuss the internal control weaknesses…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Richard Palm is the accounting clerk of Olive Limited. He uses the source documents such as purchase
orders, sales invoices and suppliers’ invoices to prepare journal vouchers for general ledger entries.
Each day he posts the journal vouchers to the general ledger and the related subsidiary ledgers. At the
end of each month, he reconciles the subsidiary accounts to their control accounts in the general
ledger to ensure they balance.
Discuss the internal control weaknesses and risks associated with the above process

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