Internal Control: Internal control refers to the policies, and plans of the business organization along with other measures with a view to safeguard its assets, encourage the employees to adhere to the plans, to improve on the operational efficiency, and to ensure correct and reliable accounting information. Internal control is a process which ensures continuous reliability of accomplishment of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations. The following are the some of the internal control procedures: Competent personnel, rotating duties, and mandatory vacations Separating responsibilities for related operations Separating operations, custody of assets, and accounting Proofs and security measures To determine: Whether J has been ethical in the behavior.

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RST Inc. completed its fiscal year on December 31. Near the end of the fiscal year, the company’s internal audit department determined that an important internal control procedure had not been functioning properly. The head of internal audit department, JT, reported the internal control failure to the company’s Treasurer. The Treasurer reported the failure to Chief Financial Officer (CFO). After discussing the issue, CFO instructed the Treasurer not to inform the external auditors of the internal control failure and to fix the problem quietly after the end of the fiscal year. The external auditors did not discover the internal failure during their audit. In March, after the audit was complete, the company released its audited annual report, including associated reports by management. The CFO authorized the release of Management’s Report on Internal Control, which stated that the management team believed that the company’s internal controls were effective during the period covered by…

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Chapter 17, Problem 17.1CP

To determine

Internal Control: Internal control refers to the policies, and plans of the business organization along with other measures with a view to safeguard its assets, encourage the employees to adhere to the plans, to improve on the operational efficiency, and to ensure correct and reliable accounting information. Internal control is a process which ensures continuous reliability of accomplishment of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations.

The following are the some of the internal control procedures:

Competent personnel, rotating duties, and mandatory vacations

Separating responsibilities for related operations

Separating operations, custody of assets, and accounting

Proofs and security measures

To determine: Whether J has been ethical in the behavior.

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