Please complete both parts.

Part I

1. In your own words, please explain what internal control is.

2. What are its three objectives?

3. What does it mean to say that internal control has limitations and what are these limitations?

Part II

Please select any TWO of the following scenarios and provide an appropriate response. Make sure you indicate which numbers you are answering.

Assume that the employee who opens the mail steals a customer payment. How will this theft be detected? How might this theft have been prevented?

Assume that the accounting clerk posts the payment to the wrong customers account. How will this error be detected? How might this error have been prevented?

Assume that the accounting clerk posts a customers payment for the wrong amount, giving the customer credit for less than he or she actually paid. How will this error be detected? How might this error have been prevented?

Assume that an employee in the cashiers department loses a check. (Maybe it was placed in the customers file rather than deposited in the bank.) How will this error be detected? How might this error have been prevented?