Question
Please Identify at least 5 internal control weaknesses in this scenario: An agent for a large insurance company has a small office in a rural
Please Identify at least 5 internal control weaknesses in this scenario: An agent for a large insurance company has a small office in a rural town. There are only two employees in the office: the agent, and his secretary. The agent spends all of his time in meeting with customers and selling insurance products to them. The secretary processes all of the paperwork connected with the insurance policies, including processing the collection of premiums and the paying out of claims. The agent feels that he is a "big man" and that his time is very valuable, and that he should not bother himself with "clerical work," so he does not supervise the secretary's work, nor does he look at the accounting records, cash documents, or bank statements. Besides, he trusts his secretary as she is very hard-working; in fact, she has never missed a day of work in five years and does not even take her annual summer vacation. The agent works for a large insurance company; however, because the number of policies and customers handled by the office is relatively small, the insurance company's internal audit office has not bothered to audit the office's records/cash for several years. The external audiots have also never visited the office.
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