Question
You CPA and your friend Mateja are owners of Main Street Brewing(MSB). Mateja emails you with some concerns: -The year-end bank reconciliation was a mess
You CPA and your friend Mateja are owners of Main Street Brewing(MSB). Mateja emails you with some concerns: -The year-end bank reconciliation was a mess and the previous couple of months reconciliations had not been done either. Currently we post summary journal entries in MSBs records. While posting the entries two months ago, the bookkeeper forgot a week's transactions, which she subsequently fixed. -We owe a significant amount to Wax Industries, which does not appear on the vendors' list. When I asked around the office, no one knew anything about this vendor. -There is an unexplained loss in the bottled beer inventory volume, even when considering that we allow our eight employees a free six-pack of beer every week. -The production log that employees fill in is not kept up to date. Employees should at least record broken bottles of beer. It would help if I knew actual production volumes and inventory balances. Required: Identify control weaknesses, their implications, then provide recommendations.
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