1. The following are weakness that have occurred in XYZ Company internal control. You are required to identify ONLY ONE TYPE of controls that were absent. (Use the table below)

Weakness	Absence of internal control
1. The Company does not cover its assets by an insurance policy.
2. Unreasonable delay in recording of accounting transactions in the books of accounts.
3. The entitys staff are not using time sheet to record their time and effort in connection with the tasks and projects they are assigned to.
4. Approval of financial manager on bank reconciliation is not required after preparing it by the accountant and reviewed by the chief accountant.
5. The entity withholds the payroll income tax from its employees, however, it does not declare or pay the tax to the income tax authority, as required by the Income Tax Law.
6. The financial manager prepares the payroll sheet and distributes the cash salaries to the employees, and he is also in charge of accounting records

7. The foreign currency transactions are recorded without documentation for the actual underlying rate at the date of the transaction.
8. The entity cash, cashbook, checkbook, receipts vouchers, payment vouchers, stamps, and other important documents are not adequately secured.

2. Following are descriptions of ten internal controls. Indicate which of the five COSO internal control components is best represented by each internal control. a) Control environment, d) Risk assessment, c) Control activities, d) Information and communication, e) Monitoring

Descriptions of internal controls	COSO internal control components
1. The company has an organizational chart that establishes the formal lines of reporting and authorization protocols.
2. The company has developed a policy and procedures related to main risks arising from the Companys financial instruments which are interest rate risk, liquidity risk, credit risk, and foreign currency risk to help mitigate such risks to acceptable level.
3. The company accounting policy and procedures manuals required that the internal documents should be properly designed to facilitate prepared the transactions on timely basis
4. The company has developed a detailed series of accounting policy and procedures manuals to help provide detailed instructions to employees about how controls are to be performed.
5. The company has an internal audit function that is reported to audit committee of the Board of Director.
6. Before a cash disbursement can be processed, all payee information must be verified by matching the payee to the companys approved vendor listing.
7. The company accounting policy and procedures manuals required that the expenses amount should be converted into U.S. $ using the proper exchange rate