Answered step by step
Verified Expert Solution
Question
1 Approved Answer
P4-51B. (Learning Objectives 2, 4: Explain the objectives and components of internal control; evaluate internal controls) Each of the following situations reveals an internal control
P4-51B. (Learning Objectives 2, 4: Explain the objectives and components of internal control; evaluate internal controls) Each of the following situations reveals an internal control weakness: LO Situation a. In evaluating the internal control over cash payments of Arlington Manufacturing, an auditor learns that the purchasing agent is responsible for purchasing diamonds for use in the company's manufacturing process, approving the invoices for payment, and signing the checks. No supervisor reviews the purchasing agent's work. Situation b. Kelly Hixson owns an architectural firm. Hixson's staff consists of 19 professional architects, and Hixson manages the office. Often, Hixson's work requires her to travel to meet with clients. During the past six months, Hixson has observed that when she returns from a business trip, the architecture jobs in the office have not progressed satisfactorily. Hixson learns that when she is away, two of her senior archi tects take over office management and neglect their normal duties. One employee could manage the office Situation c. Ron Lucas has been an employee of the city of Scandia for many years Because the city is small, Lucas performs all accounting duties, in addition to opening the mail, preparing the bank deposit, and preparing the bank reconciliation. Requirements 1. Identify the missing internal control characteristic in each situation 2. Identify each firm's possible problem. 3. Propose a solution to the
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started