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Question - KKL Sdn Bhd discovered that a large amount of cash was missing over the last few months. Based on an internal investigation, it was found that the record keeper had written several cheques in favor of his family members and had recorded the cheques withdrawal as miscellaneous expense in the book of account. Due to this issue, the business incurred a loss of RM45,000. To make matter worse, the record keeper has absconded and nowhere to be contacted by the KKL Sdn Bhd management.
REQUIRED -
(a) Explain the principle of internal control that was violated by the management of KKL Sdn Bhd.
(b) Provide a recommendation to overcome the internal control issue faced by the management of KKL Sdn Bhd.
(c) What is the probable limitation of the recommendation provided in (b)?
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