Question

"Management and Internal Control" Please respond to the following:

Create a scenario where external auditors determined that a company's internal controls were deficient, but such a deficiency might not mean that a material weakness existed. Ascertain the impact on the audit plan if additional deficiencies are discovered on other related internal controls. Support your position.

Use the Internet or Strayer Library to research at least two (2) accounting scandals within the past five (5) years. Based on the accounting scandals you researched, identify the accounts that the fraud had affected, and analyze the auditor’s responsibility to detect fraud. Next, suggest key internal controls that would have either prevented or detected the fraudulent behavior or transactions. Justify your response.

Answer 1

answer:

• Give us a chance to take a circumstance like stock valuation and out of date quality where the outer reviewers surmise that the organization's interior control process is low as the copay just takes a quarterly physical check and does the investigation of best 20 high utilization stock things.
• Anyway the organization explored the programmed stock posting framework by weighted moving normal expense for crude materials and standard expense for Finished products and WIP.
• The figuring and posting system is splendidly planned and except if there is information section blunder , there is less possibility of valuation mistake.
• Here the inspectors discovered that entirely material shortcoming in stock valuation framework is there yet to check and control out of date quality the organization must do month to month check bring down expense or market esteem test for the moderate moving and profoundly value unpredictable things.
• Evaluators may decide on doing some example checks a this zone and dispense appropriate time for that.
• Then again , given us a chance to expect that some control lacks in Finished Goods stock valuation for the month end shutting found.
• Here and there the merchandise have been invoiced and delivered yet charging has not been done and at times charging has been finished however dispatching not done and the FG tallied in physical tally and stock expanded.
• The evaluators found the need to complete a profound jump into this region to discover the subtle elements of method for working and the inner control present.
• The reviews will change the review paln to dedicate more opportunity to check the month end FG stock bookkeeping process stream, check the controls existing and the duty network for guaranteeing conveyed products are charged and charged merchandise are conveyed or kept in an isolated region in store to maintain a strategic distance from stir up in tallying.
• The reviewers will likewise check the records of every one of the month closes for most recent a year to locate any material error in stock valuation of FG. Subsequently with the revelation of a few inadequacies , the entire review plan should be adjusted to investigate the zone of conceivable interior control shortcoming.