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4 years ago

Identify the internal control weakness in the following situations. State how the person can hurt the company.

Business

1 answer:

Degger [83]4 years ago

4 0

Answer:

Identification of the Internal Control Weaknesses:

A. There is no segregation of duties and there is lack of access control. Jerry Miller as a security guard is not expected to have a master key to the cash box. With this he can pilfer the cash. If he prepares the report that shows the number of cars that parked on the lot, he is not supposed to also prepare the day's cash receipts. Otherwise, he can state any number of cars as parked that he likes, and which corresponds to the cash he might leave in the Cash box since he also has a master key.

B. There is no segregation of duties and there is lack of supervision, proper reconciliations, and assets audit. Sharon Fisher handles purchase transactions from the beginning to the close all alone with a third party. This exposes the company to procurement frauds and collusion with suppliers. She can purchase assets for the company at prices that would enrich her personally.

C. Forming an audit opinion on the basis of ratio analysis of last year's comparative financial statements exposes the company to audit risks. While ratio analysis is part of the basis for forming audit opinions, it is surely not the first audit procedure to obtain audit evidence to support his audit opinion on the financial statements. An auditor is expected to obtain sufficient audit evidence and perform audit substantive tests of financial statement assertions. He or she is also expected to review the internal control system to ensure that it is operating effectively after establishing its existence and reviewing changes in internal controls.

Explanation:

Internal Controls are controls established by management in order to help it achieve business goals. There are many internal controls, including Separation of Duties, Access Controls , Authorization and Approvals, Asset Audits, Reconciliations, and Data Backups. The purposes of internal controls are to establish the reliability of financial reporting, ensure timely feedback on the achievement of operational or strategic goals, and achieve compliance with financial management laws, and accounting regulations.

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Concord Company sells merchandise on account for $5700 to Ivanhoe Company with credit terms of 2/10, n/30. Ivanhoe Company retur

Anna71 [15]

Answer:

The right solution is Option b ($4606 ).

Explanation:

The given values are:

Company sells merchandise,

= $5700

Company returns,

= $1000

Now,

The amount of the check will be:

= $(5700-1000)\times 98 \ percent$

= $(5700-1000)\times 0.98$

= $4700\times 0.98$

= $4606$ ($)

6 0

3 years ago

CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $375,00

Shtirlitz [24]

Answer:

the company should buy and install the press because the NPV of the project is positive ($73,133.75)

Explanation:

the MACRS 5 year depreciation:

$375,000 x 20% = $75,000
$375,000 x 32% = $120,000
$375,000 x 19.2% = $72,000
$375,000 x 11.52% = $43,200
$19,800, since salvage value at year 5 is $45,000
$0 x 5.76% = $0

salvage value $45,000

total initial investment = $375,000, discount rate = 11%

cash flow year 1 = {($142,000 - $15,000 - $75,000) x (1 - 34%)} + $75,000 = $109,320
cash flow year 2 = {($142,000 - $2,000 - $120,000) x (1 - 34%)} + $120,000 = $133,200
cash flow year 3 = {($142,000 - $2,000 - $72,000) x (1 - 34%)} + $72,000 = $116,880
cash flow year 4 = {($142,000 - $2,000 - $43,200) x (1 - 34%)} + $43,200 = $107,088
cash flow year 5 = {($142,000 - $2,000 - $19,800) x (1 - 34%)} + $19,800 + $45,000 = $144,132

the NPV of the project = -$375,000 + $109,320/1.11 + $133,200/1.11² + $116,880/1.11³ + $107,088/1.11⁴ + $144,132/1.11⁵ = $73,133.75

4 0

3 years ago

Use the following comparative figures for Apple and Google. Google 12.662 $ Key Figures Net income (in millions) Cash dividends

azamat

Answer and Explanation :

Few information is missing in the question kindly find the attachment

As per the data given in the question,

The formula and the computation is shown below

1) Book value per share = Equity applicable to share ÷ share outstanding

Apple Google

Equity common share a $134,047 $152,502

Common share outstanding b 5,126.201 694.783

Book value per common share a ÷ b $26.15 $219.50

2)Basic EPS = Net income ÷ weighted Avg common share outstanding

Apple Google

Net income a $48,351 $12,662

weighted Avg common share outstanding b 5217.242 693.049

Basic EPS a ÷ b $9.27 $18.27

3)Dividend yield = Cash dividend per common share ÷ Market price per share

Apple Google

Cash dividend per common share a 2.4 0

Market price per share b $154.12 $1046.4

Dividend yield a ÷ b 1.56% 0.00%

4) Price earning ratio = Market price per share ÷ Basic EPS

Apple Google

Market price per share a $154.12 $1046.4

Basic EPS b 9.26754 18.26999

Price earning ratio a ÷ b 16.63 57.27

5) A higher PE ration indicates that investors want to pay a higher share price because of growth expectation in near by future

Therefore Google has higher PE ratio

Hence, investors have greater expectation of performance of Google in future.

4 0

3 years ago

Kevin Abt noticed that people were cooking meals in their homes less often but wanted to avoid the hassle of going out to eat. T

masha68 [24]

Answer:

Opportunity.

Explanation:

There was an opportunity presented when Kevin noticed that people do not want to cook at home but also they do not want to go through the hassle of going out to buy food. A need was identified and the solution was the Takeout Taxi initiative that delivers restaurant-prepared food to customers.

Costumers that did not want to cook at home and did not want to go out were now satisfied by this service.

5 0

3 years ago

Read 2 more answers

Corporations have limited liability, but lose ultimate control of corporate assets to the ______________ ..

Vinil7 [7]

Answer:

Stockholders

Explanation:

Stockholders are the owners of a company. As owners , stockholders have voting rights in the company. Shareholder elects directors who represent them on the board of directors. Each share is equivalent to one vote. The board members recruit top management of the company. The board provides policy guidelines, makes critical decisions, and supervises senior management.

By electing board members, shareholders influence the management of the business. Should the stockholders be unhappy with the way the company is being managed, they can vote out the current director and elect new ones. The new directors then appoint fresh managers. In this way, shareholders maintain control of the assets of the company and its assets.

5 0

3 years ago