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Risk in Internal Control Procedures

2. a. Consider the four vignettes: Internal control over cash, Embezzling, information Technology and inventory. For each one, suggest one additional internal control procedure. Discuss whether the procedure you suggest is preventive, detective or corrective; also identify the type of risk it is designed to control based on risk categories.
b. Hassan and Ashok are employed by one of the Big Four CPA firms. Both have recently earned their CPA licenses, however, and are considering starting their own practice. Using Brown's risk taxonomy, identify and describe at least five risks Hassan and Ashok must be aware of if they start their own business. For each risk you identify, suggest one or more internal controls that could ameliorate it?

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2. a. Consider the four vignettes: Internal control over cash, Embezzling, information Technology and inventory. For each one, suggest one additional internal control procedure. Discuss whether the procedure you suggest is preventive, detective or corrective; also identify the type of risk it is designed to control based on risk categories.

In reference to internal controls for cash, some basic ideas could include ensuring that all cash receipts should are deposited in the bank daily to negate any employees or customers from having an opportunity to steal them as well as requiring that all cash payments should be made by check. Embezzling can be prevented by using a checking account to ...

Solution Summary

This solution of 400 words suggests an internal control procedure for four vignettes of internal control over cash, embezzling, information technology and inventory. It also describes five risks in starting up a business using Brown's risk taxonomy.

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