Ebeneezer Company’s Internal Control System Assignment | Top Universities
- identify and illustrate how the principles of internal control are used to manage and control a firm's resources and minimize risk.
Edward Ebeneezer founded Ebeneezer Company, a rapidly growing start-up business, in 2018. Edward hired a record keeper seven months ago. The record keeper, Wanda Wonderful, left town after the company’s manager discovered that $65,000 had disappeared over the past five months. An audit disclosed that Wanda had written and signed several checks made payable to her husband, Robbing Ron. Wanda recorded the checks as salaries expense. Robbing, who cashed the checks but never worked for the company, left town with Wanda. As a result, the Ebeneezer Company incurred an uninsured loss of $65,000.
- Evaluate Ebeneezer Company’s internal control system by listing one principle of internal control that appears to have been ignored.
- Recommend to Edward how to avoid such a loss in the future with an explanation of the process to mitigate the internal control that was ignored.
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