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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.
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