Chapter 7, Problem 7.9EX

To determine

A.

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 state: The weak link in the internal control.

B.

To determine

Ways to correct the weakness.