Question As the audit senior, you are assigned to evaluate Gracelands internal control environment This was most recently done in early December, Year 1, prior to the year end Based on your analysis, you documented the controls, and a sample of your documentation is provided below For each control listed below, identify which component of internal control it applies by using the following key 1 Control environment 2 Risk assessment 3 Control activities 4 Information and communication 5 Monitoring The receptionist open all of the cash receipt and remittance received in the mail Cash from the customer is received via lockbox system This year Graceland modified its internal control system for sales and accounts receivables based on Earhart's management letter comments from the previous year Gracelands management dominated by its president and vice president of sales Credit limit new for new customers are set by Graceland credit manager Individual job descriptions at Graceland clearly outline the specific responsibilities of the employee The accounting system for sales is designed to generate periodic sales reports The board of directors of Graceland participates in the interview and hiring approval process of all personal at the management level and above The IT manager recognized that certain components of the accounting system do not communicated with each other like they are supposed to Because of the apparent lack of integration between some of the components, he has sought additional assistance from an external IT consulting company to solve the problem

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Question As the audit senior, you are assigned to evaluate Gracelands internal control environment. This was most recently done in early December, Year 1, prior

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As the audit senior, you are assigned to evaluate Gracelands internal control environment. This was most recently done in early December, Year 1, prior to the year-end. Based on your analysis, you documented the controls, and a sample of your documentation is provided below.

For each control listed below, identify which component of internal control it applies by using the following key:-

1-Control environment

2-Risk assessment

3-Control activities

4-Information and communication

5-Monitoring

	The receptionist open all of the cash receipt and remittance received in the mail
	Cash from the customer is received via lockbox system
	This year Graceland modified its internal control system for sales and accounts receivables based on Earhart's management letter comments from the previous year
	Gracelands management dominated by its president and vice president of sales
	Credit limit new for new customers are set by Graceland credit manager
	Individual job descriptions at Graceland clearly outline the specific responsibilities of the employee
	The accounting system for sales is designed to generate periodic sales reports
	The board of directors of Graceland participates in the interview and hiring approval process of all personal at the management level and above
	The IT manager recognized that certain components of the accounting system do not communicated with each other like they are supposed to. Because of the apparent lack of integration between some of the components, he has sought additional assistance from an external IT consulting company to solve the problem.