The following independent situations have weaknesses in the internal control.

i. Dina has been your trusted employee for 24 years. She performs all cashhandling and accounting duties. Dina just purchased a new luxury car and a new home in an expensive suburb. As owner of the company, you wonder how she can afford these luxuries because you pay her only RM30,000 a year and she has no source of outside income.

ii. The office supply company where Danish Company purchases sales receipts recently notified Danish Company that its documents were not prenumbered. Danish, the owner, replied that he never uses receipt numbers.

iii. Farah Companys clerk keeps all cash receipts in an empty box for a week because the owner likes to go to the bank on Tuesdays when Farah is working.

iv. Ain Woods, a private company, falsified sales and inventory figures in order to get an important loan. The loan went through, but Ain later went bankrupt and could not repay the bank.

a. Explain the missing internal controls and the possible problem/s caused by each of the control weaknesses above. [30 marks]

b. Propose a solution to each of the internal control problems in Q2(a).