1. You have been hired as the CFO of a new company and are determining the company's accounting needs.
- describe to your staff at least 2 ways in which accounting data are used to make business decisions.
- describe at least three related accounting terms or theories.
2. You are an accountant at a local CPA firm that is auditing the accounting records of ABC Company. You have been asked to educate the accounting department about the limitations of the internal control system in preparation for an upcoming audit. During your audit, you have identified that because of a weak internal control system, an adjusting entry for prepaid insurance was not recorded for the first 3 months of the year at $500 per month.
- Identify the limitations of the internal control system. Provide at least 3 limitations.
- Provide at least 2 exs of internal control procedures, and describe how these procedures can be implemented.
- Identify symptoms of a lack of internal control.
- describe the impact of the missing journal entry on the financial statements of the company.