Purchase Solution

Accounting Theories & Limitations of Internal Control

Not what you're looking for?

Ask Custom Question

1. You have been hired as the CFO of a new company and are determining the company's accounting needs.
- Explain to your staff at least 2 ways in which accounting data are used to make business decisions.
- Explain 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 examples of internal control procedures, and explain how these procedures can be implemented.
- Identify symptoms of a lack of internal control.
- Explain the impact of the missing journal entry on the financial statements of the company.

Purchase this Solution

Solution Summary

This solution provides you with information related to two of the ways in which accounting data are used to make business decisions; it explains three accounting terms; it then tells limitations of the internal control system, gives two examples of internal control procedures and how they can be implemented, and tells the symptoms of a lack of internal control system. Finally it also explains the impact of the missing journal entry (related to prepaid insurance) on the financial statements of the company.

Solution Preview

Hello Student,

1. In this case you have been asked, as CFO of a company, to explain to your staff at least two ways in which accounting data may be used to make business decisions. Before you begin to answer this section of the question though, the first thing you may want to do is note some general information about accounting data (which can also be explained to staff). Note the ...

Purchase this Solution


Free BrainMass Quizzes
Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.