The purchsed parts stockroom is segregated from the production areas by a wire fence. While visiting a plant, you notice that the gate was left open all day and access to the stockroom (wihich contains many valuable and easily concealed items) was available to any employee. The stockroom's perpetual inventory records were formerly checked by an employee who made periodic test counts. This employee has retired and not been replaced. As a result, such counting has ceased. You expanded your tests in view of the situationsand are satisfied that the perpertual records reasonably reflect the quantities on hand.

a) Identify the control environment factors that affect the company's internal control

b) List the strength and weaknesses in Hood Furniture internal control.

c) What suggestions do you have for improving the weaknesses identified in b) above.