Question

Richard Palm is the accounting clerk of Olive Limited. He uses the source documents such as purchase orders, sales invoices and suppliers’ invoices to prepare journal vouchers for general ledger entries. Each day he posts the journal vouchers to the general ledger and the related subsidiary ledgers. At the end of each month, he reconciles the subsidiary accounts to their control accounts in the general ledger to ensure they balance. Discuss the internal control weaknesses and risks associated with the above process.

Answer 1

A control weakness is defined as a disappointment in the implementation or efficiency of internal controls. Hateful actors could leverage internal control weakness to avoid even the strongest security measures. Similarly, Internal control weaknesses have been well-defined by problems connected with improper recognition of revenue, lack of separation of duties, and nonconformity of accounting policies.

Any lack of information are incorrect duplicate information might affect the the internal control and shows the the wrong accounts to the control accounts in the general ledger therefore Richard palm should be taken the necessary care while entering the records to is journal.