LO 1. Demonstrate an understandiag of internal control system of a single organization and differentiate between the accounting and administrative controls: LO 2. Apply the know ledge of bank reconciliation prepared by the organizations including the amendment to the cash book. Scenario AL-REEM LLC is a medilm-sized manufacturing company establishod in Oman that produces electromic components for various industries. The company has experienced rapid growth over the pant fow years and bas recently expanded its operations to multiple locations in Sohae, Saliah and Sur. However, AL-REEM LLC has not implemented a proper internal control system to mange its finances and opcration. This lack of intental control has led to several issees that are afficeting the company's profltability and reputation. Firm has not established cleur segregation of daties between its employees. For example, the same employee who handies cash receipts also prepares the bask reconciliation statement. This leck of segregation of duties. increases the risk of errors and fraud, as there is no check-and-balance system in place. The openisz overdent balance of eash book for January was OMR 711 and it was entered as OMR 761. Proper record-keeping system in place in the firm. This has led to missing or incomplete documentation, maxing it difficult to track financial transactions and account for inventory. Without accurate and complete records, it is difficult for the company to make informed decisions and to comply with rogulatory requirements, Physical security measures are inadequate, which makes it casy for unathorized individuals to access the company's fucilities and assets. For example, the compuny's iaventory is not properly secured, and there is no system in place to track inventory movement. This increases the risk of theft and investory losses. IT controls are weak, and the company does not have a dedicated IT team to manage its systems. This has led to cybersecurity risks, such as data breaches and unaudborized aceess to sensitive information. In addition, the company's financial and inventory management systems are not integnatod, leading to manval workarounds and increased risk of errors. You have been hired as a consultant. Your task is to assess the company's internal control system and provide recommendations for improvement. Question 1 Describe the types of accounting controls, administrative controls, and preventive, detactive, and corrective controls that you would consider. Then, identify specific weaknerses in the company'sinternal control system and suggest ways to address them using the different types of controls you have identificd. (15 murks) in your response, be sure to: Define the different types of controls (accounting, administrative, preveative, detective, corrective) and explain their purpose. Analyze the company's internal control system and identify specific weaknesses. Provide recommendations for improvement that incorporate the different types of controls you havo identified. Note: Teaching Nexus must be referred Relevant Teaching Nexus: FA. Assignment Brief Spring 2022-23 A 2 -controls-in-harmon/cecontent/dam/ey-sites/ey-com/en_dl/topics/advisory/ey-are- Question 2 The following is a summary of a cash book as presented by AL-REEM LLCs for the month of January. All receipts are banked, and all payments are made by cheque. Opening balance (1* January)- Orerdraft-OMR 761 (Note; refer case study) Receipts OMR 1469 Payments-OMR 1262 On investigation you discover: I. Cheques drawn amounting to OMR 267 had not been presented to the bank for payment. II. Cheques received totaling OMR 762 had been ent beren credited by the bank until 3 November. III. A cheque for OMR 22 for sundries had been entered in the cash book as a receipt instead of as a IV. A cheque received from Abdullah for OMR 80 had been retumed by the bank and marked No funds V. available'. No adjustment has been made in the cast book. V. A standing order for the insurance instalment of OMR 150 on 30 January had not been entered in the VI. cash book. VI. All rent received are credited directly to the bank account. During October amounts totaling OMR 62 VII. A cheque drawn for OMR 66 for cleaning expense bad been incorreetly entered in the cash book as OMR 60. VIII. Bank charges of OMR 136 entered on the bank statement have not been entered in the cash book. Required: (a) Show the adjustments required in the cash book. ( (2 marks) (b) Prepare a bank reconciliation statement as at 31 January. (c) Evaluate how an appropriate intemal control system can help to improve cash management bank roconciliation. ( 4 marks) The written report must indude: - Title Page - Table of Contents - Introduction - Content - Recommendation - Conclusion and - End reference list (Harvard Style). Question 3 The examinerflecturer will conduct a presentation on this report to check the authenticity. FA 2 Assignment Brief Spring 2022-23 Learners are required to prepare a power point presentation consisting of 46 slides and submit it on Turnitin before the presentation. (5) (Total of 5 Marks)