Problem 8-1A (Algo) Analyzing internal control LO C1 Following are five separate cases involving internal control issues. Required: 1. For each case, identify the principle(s) of internal control that is violated. a. Carla Farah's manager has told her to reduce costs. Carla decides to raise the deductible on the plant's property insurance from $5,000 to $10,000. This cuts the property insurance premium in half. In a related move, she decides that bonding the plant's employees is a waste of money because the company has not experienced any losses due to employee theft. Carla saves the entire amount of the bonding insurance premium by dropping the bonding insurance. b. The owner of Super Pharmacy uses a check software/printer to prepare checks, making it difficult for anyone to alter the amount of a check. The check software/printer, which is not password protected, is on the owner's desk in an office that contains company checks and is normally unlocked. c. Tywin company keeps very poor records of its equipment. Instead, the company asserts its employees are honest and would never steal from the company. d. Marker Theater has a computerized order-taking system for its tickets. The system is backed up once a year. e. Nori Nozumi posts all patient charges and payments at the Hopeville Medical Clinic. Each night Nori backs up the computerized accounting system but does not password lock her computer.