·e ~ .

IN.TERNA
.
L CO NT RO L
. '
AFFECTING ASSETS

P,xpecte~ Le am ing Outcomes

Aft er studying .t he chapter, ,you should be abl
e to ...
1. Describe' the internal control over the
major ·components of
assets of a business enterprise namely

a)" Cas h
b) Financial Investments · ·
..
c) Receivables: Accounts and Notes and
· -accounts related revenue
·
d) Inventories and related Cost of Goods sold
e) Property, Plant and Equipment

2. Understand the potential misstatements

(due to fraud and
errors) of the asset accounts. and how wea
kness in internal
control increases the risks of misstatements.
'
 - .:-::;i r. . ..

CH A~E R 16

l~TERNAL CONTROL AFFECTING ASSETS

INTERNAL CONTROL OVER CASH TRANSACTIONS

Most of the processes re.lating to cash handling ~re ·th~ r~sponsibility of the
finan~e deP;artment,. ~nder the direction of the treasurer. These processes include
h~dh~g. and depositmg cash receipts'; ·signing ch~cks;/ investing ·idle cash; and
mamta_i~mg cu stody of cash, marketable securities, and other negotiable assets.
In addition, the finance department. must forecast cash requirements and make
both short-term and, ~ong-term financing arrangements.
.
.

IdeaUy, the functiQns qf the finance departm.ent and the accounting department
1

should be integrated -in a_m~nner th.at prov ides·assurance that: · . ·

1. ·
. .

1. All cash that should have been received 'was in fact received, recorded
accurately and deposited promptly: J • '

2. Cash disbursements have been made for authorized purposes only and
. have· been properly recorde~.
3. Cash balances are ~aintained at adequate, but not excessive, levels by r

forecasting expected cash' receipts and payments related to ·normal .

operations. T_he need for obtaining loans for investing ex~ess cash is thus -
made known on a timely ba~is.
.' •
; . I

A detailed study ~f the business. processes of the company is n~cessary in

developing the most efficient control pr?ced~res, but there are s?me ·general
_guidelines to ~good cash handling practices m all types of busmess .. These · .
guidelines for achieving internal control over ca.sh may be summarized as
follows:
1. Do not permit any one employee to handle a transa_ction from beginning
'
'
to end.
2. Separate cash ha1~dling from record .k~~ping.
. •·v·ing of cash .to the extent practical.
3. Centra I1ze rece1

. ' \
l46 Chapter 16

4. Record cash receipts on a timely basis. ,-,,

S. Encourage customers'to obtain rec~.ipts and observe cash register totals.
. .

6. Deposit cash receipts daily.

7. Make all disbursements by check or electronic funds transfer; with the
exception of small expenditures from petty cash. · ·
. 8. Have monthly bank rec~ncitfatioh prepared by . employees not
responsible for the issuance of checks or custody·of cash. The completed
reconciliation should b~ reviewed promptly by an appropriate official. ·
9: Monitor cash receipts . a;1d 'di~bursements by compari~g recorded
amounts- to forecasted amounts and investigating ·variances from
forecaste·d amounts. · '

Potential, Misstatements - Cash Rec~ipts

Description of Misstatement . Examples lnterne1I Control Weakness or

Factors ·that Increase the
· Risk of the Misstatement
Recording fictitious i:ash receipts Proud:
• Overstating ~ris~ receipts . .. • Lack of segregation of
on the books by duties of the functions of
transferring cash between . access to cash and record
honk oc.counts without keeping; no effective
appropriate recording of . review.of bank ·
t~e transfer to cover up an reconciliations.
embezzlement of cash.
Failure to record receipts from Fra.ud:
cash soles
• Aca~hier fails to ring up · · • Inadequate supervision of
, and record cash sales and ·. cashiers; failure to
embezzles.the cash. encourage customers to
obtain ,cash receipts.
Error:
• 1 Ab~okkeeper ~cc.identaUy • ., Inadequate controls for
I omits the recording of the reconciling cash register
receipts from one cash · tap_es and accounting
register for ,the day. ' records; inadequate
controls for reconciling
· bonk accounts'.
 Internal Control Affect ing Assets 247
foi ure to record cos hfrqm
Fraud:
collection of octounts recei.vable
• Acashier embezzles cash • Lack of segregation of
payments by customers on duties between personnel
receivables, without who hav_e access to cash
recording the receipts in the receipts and those who
'
customers' accounts. ' make entries into the
accounts receivable
records.
• Abookkeeper accidentally • Lock of segregation of .
who has access·to cash duties between personnel
receipts embezzles cash ,who hove access to cash
coll~cted from custoiners receipts, and those who
, and writes off the related , make entries into the
receivables. accounts receivable
'
records .
Error:
'
I

• Abookkeepet accidentally • Inadequate reconciliations ,

foils to record payment on of subsidiary records of
a receivabl.e. accounts receivable with
the general ledger control
., ac~ount.
Early (late) recognition of cosh Fraud: I

receipts - "cutoff problems"

• Holding the cash receipts • Ineffective board of
j•ournal open to record next . directors, audit committee,
year'-s cash receipts as or inter,nal audit function;
having occurred in this II tone at the top" not

yeat. conductive to ethical

. c-onduct; undue p·ressur&to
show improved financial
position.
Error:

• Recording cash receipts • Failure to list and.deposit

based on bad information cash .receipts on a timely
about date of.receipt. basis. ·
248 Chapter I 6

Potential Misstat.ements ........ Cash Disbursements

Internal Coqtrol Weakness or
Description of Misstatement · Examples Factors that Increase the
Risk of the Misstatement

lnaccurate recording of a Fraud:

purchase or disbursement • Inadequate segregation of
• Abookkeeper prepares a duties of record keeping
check to himself and and preparing cash ·
records it as having been
disbursements, or check
issued.to a major supplier.
signer does not review and
cancel supporting
documents.
Error:
• Ineffective control for
• Adisbursement is made to
matching invoices with
pay an invoice for goods
receiving documents
·that hove -not been
before disbursements are
-received.
authorized.
• Disbursements for travel
and entertaiqment ore • lneff~ctive accounting
improperly included with coding procedures may
merchandise purchases. result from incompetent
,_ accounting personnel,
inadequate chart of
accounts, or no controls -
/
over the posting process.
Duplicate recording and payment Error: '. .
I

of purchases • Apurchase is recorded • Ineffective controls for

when an invoice is received review and cancellation of
from a vendor and recorded supporting documents by
again when a duplicate · the check signer.
invoi~e is sent by the ·'.
vendor.
Unrecorded disbursements -fraud: I

• In conjunction with • Ineffective control over

recorded (but _deposited) recor~ keeping for and
cash receip'ts, an employee ·access to cash.
writes and choses an
unrecorded check for the
identical amount.
 Internal Control Affecting AsseIs · 249 -
INTERNAL CONT ROL OVER FINANCIAL INVESTMENTS

The moSt impor tant group of financial investments consists of marke table
stocks
and bonds becau se the~ are found more frequently ~nd usually are of greate
r peso
value than the oth~r kmds of investment holdings. Other types of invest
ments
often encou ntered mclud e commercial paper issued by corporations, mortg
ages
~and tru st d~ds, _and the cash surrender value of life insurance policie
s. The
internal audito rs also must b'e concerned with derivatives that are used to
hedge
variQu~ ~nanc ial and operational -risks or for- specalation. Deriva tives
are
financ,~l mstrum ents that "deri-ve" their value from other financial ~nstru
ments,
underl~mg assets , or indexes. For example, a simple derivative would involv
ea
co,:nm~tment by a compa ny to purchase a commodity at a certain price at
some
pomt m the future. Other derivatives are much more compl ex,.-in volvin
g, for
example, relatio nships between fluctuations in European' interest rates and
price of coppe r. the

The major eleme nts of adequate internal control over financial invest
ments
incl~de the follow ing:

1. Forma l invest ment policies that limit. the nature if invest ments · m
securi ties and other financial instruments.
2. An invest ment committee 'of the board of directors that author izes and
review s financial investment activities for compliance with invest ment
policie s.
3. Separa tion of duties between the ~x~cutive authorizing purcha ses and
sales of securi ties and derivative .instruments, the custod ian of the
securi ties, and the person maintaining the records ·of investments.
ti-. Comp lete detaile d records of al! securities and derivative instrum
ents
owned and the related provisions and terms.
5. Regist ration of securities in the na111e of the company.
6. Period ic physical inspection of s~~u.rities on hand b,y_ an _internal audito r
or an offiqial having no respons1b1hty. for the authorization, custod y, or
record keepin g of investments,
7. Determ ination -o f appropriate acco~11ting for compl ex financial
instrum enis by compe tent personnel.

l
~ -
 I.,

/
250 ·Chapter 16
custody and record keeping is
In many concerns, segregation of the. functions of st
d by the use of an indepen dent safe keeping agent, s~ch as a ock~older,
ach ieve
nt has no direct c~ntact with t~e
bank or t~ust company. Since the independent age
ng..records of th~ mv~st~ents m.
employee responsible ·froni maintaining accounti
d through falsrfic,ation of the
securities, the possibilities of ·concealing frau
,placed in the custody of an
accounts are greatly reduced. If securities are not
pen dent age nt, they should be kep t in a ban k safe.:.deposit ,box under the joint
inde
cials. Joint control means that
control of two or more of the company's offi
to the securities except in the
neither of the two custodians •may have access
shOL_rld b~ maintained in the
presence of the other. A list of securities in the box
should be recorded on this list
box, and the deposit or withdrawal of·securities
present. The safe-deposit box
along with th~ date and signatures of all persons
in the name of an officer having
rental should be-in the name of the company, not ,
custody .of securities.
' ' .
.
vative instruments owned are
Complete detailed records of all securities and deri
u~ntly consist of a subsidiary
essential to satisfactory control. The.~e records freq
with such . identifying data as
record for each security and derivative inst_rument,
th~ exact name, face amount or par value, cert
ificate number, number of shares,
s and -. any interest or dividend
date of acquisition, name of broker, cost, term
ends should be compared to .
payments ; received. Actual interest an~ .divid
should be i.nvestigated. The
budgeted amounts, and · signi,ficant. variances
usted 'to· a responsible financial
___ purchase and, sale ·of investm'ents often is entr
ent committee of the board of -
executive, subject to frequent review by an investm
directors. .,
. .
.

ents
Potential Misstatements - Financial Investm l

, Examples Internal Control Weakness or

Description of Misstatemen, t, · :
' - Factors thcit Increase the
. Risk of the Misstatement
Misstatement of recorded Error:
value of investments • failure to record cha~ges in
market values of
• Inadequate accounting
·manual; incompetent
investments. · , ·accounting personnel.
fraud:
• Misstatement of the value • Ineffective board of
of closely held investm'ent. · 1 directors, audit committee, .
or internal audit function;
not conducive tQ ethical
conduct; undue pressure to
meet earnings targets.
 Inter17al Control Affecting Assets l~l
Unauthorized investment
Fraud:
transactions ''
• An employee with access to • lnadequat~ segreg(ltion of
I
securities coverts them for duties of record keeping for a~d
personal use. . custody of securities.
Incomplete recording of
investments
Error: . ,
,
• Failure to record derivativ·e • a. lnade~uate
agreements which·ore accounting manual;
- embedded in other incompetent accounting.
agreements. . personnel.
I
I
~ I

' • ' b. Inadequate monitoring

by internal auditors.

~ERNAL CONTROL OVER'RECEI VABLES

Accounts receivable include not only clai~s against customers ·arising from the
sale of goods or services, but also a variety of miscellaneous claims such _as loans
to ~~cer~ or employees, lo~ns to sub.sidiaries, c~ai_ms a&ainst various other films,
claims for tax refunds and advantages to suppliers~· · · ·

Sources and Nature 9r"Notes Receivable · '

Notes receivable ate written prnmise_s. to pay ce~ain amounts at future dates.
Typically, notes receivable· ·is ·used for handling . transactions of substantial
amount; · these negotiable documents are \ ~~dely .tised. In banks and other
financial institutions, notes_ receivable usually constitutes the single most
important asset.

Internal Control of Accounts Receivable and· Revenue

. . ,

To und~rstand internal control over a·ccount;._receivable and revenue, one must

consider the various components; •in~luding the · control environment, risk
assessment, monitoring, the (accounting) -~-information and communication
system, and c<:>"ntrol activities.
 2S2 · Chapter J6

Cont~I Environment
Because ·of the risk of intentional mis
statement of revenues, the c<introl
envi~nment iS very important to effeci
ive internal contr0l_ over n:venue and
receivables. Of particular importance is
board of directors that monitors .manag an independent audit committee of the
9ment's judgments about revenue
recognition principles and estimates, as
well as an •effective internal audit
function. Manligement should establish a
tone at the top of the organization that
encourages integrity and ethical fiiiiinc
ial. reporting. These . ethical standards
should be Communicated and observed
throughotJt the organization. AISO
tncentives for dishonest reporting, such as
uhdue emphasis on metitilig unrealisti~
sales or earnings targets, should be elimina
ted.
Potential Misstatements ·_ Revenue/ Re
ceivables
.
Internal Control Weakness or
Descriptio~ of Misstatement E~amples
I
Factors that Increase the
'-
Risk of the Misstatement ·
Recording unearned revenue . Fraud: ' .
I

..
Recording fictitious sales • Ineffective board 'of
✓
' • without receiving a directors, audit committee,
customer order or shipping or internal audit function;
undue pre>sure to meet
.
. . . the goods. '
.e_arnings targets. "top
• Intentional overshipment of
, management action" not
' goods.
conductive to ethical
:
I

Errors: conduct.
,.Recording soles bas·~ on • Ineffective billing process
,
• in which billing is not tied
the receipt of orders from
customers rather than the to shipping information.
:' shipment•of go_ods.
• lnoccurdte billing and · • Ineffective controls for
recording of.soles. testing invoice.s, or
ineffective input validation
checks and computer
reconciliations to ensure
.
the accuracy of databases. i
 /

Internal Control Affec ting Asse ts 253

• Recording cash that • Inadequate accounting

represents a liability (e.g., manual; incompetent
receipt of a customer's accounting perso nnel.
deposit) ~s revenue.
Early (late) recognition of revenue Fraud:
- "cutoff error"
• Holding the sales journal • Ineffective board of
open to re.cord next year's directors, audit committee,
sales as having occurred in or internal audit function;
the current year. · not c·onducive to ethical
conduct; undue pressure to
meet sales targets.
Error:
• Recording sales in the • Ineffective cutoff
wrong period based on procedures in the shipping
incorrect shippi'1g department.
information.
lecording revenue when Fraud:
significant uncertainties exist '
• · Recording ~oles when the • Ineffective board of
customer is·likely to return directors, audit committee,
the goods. or internal audit function;
not conducive to ethical
conduct; undue pressure to
Error: meet soles targets.
• Recording soles when the
• I • Aggressive attitude of
. customer's payment is management toward
contingent upon the financial reporting;
customer receiving incompetent chief
financing or selling the accounting officer.
goods to another porty
(e.g., consignment soles).
·Recording revenue when Fraud:
significant services still must be • Recording franchise • Ineffective board of
. performed by seller revenue when the directors; audit committee,
franchises are sold even or internal audit function;
.though Qn obligation to . not. conducive to ethical
perform significant services . con,duct; undue pressure to
still exists . meet sales targets.
I
 254 Chapter 16
I

Error:

• Ainount of revenue earned • Aggressive attitud_e of

· manag·ement. toward
on franchises Is
I

I miscalculated financial reporting;

'incompetent chief '

account ina officer.

Overestimation of the amount of '
Fraud: I
revenue earned. ~

I
• Misstating the.perce~tage • Ineffective board of
of completion of several directors, audit committee,
- 'projects by a construction or internal audit function;
.. . company using the not conducive to ethical
percentage-of col'hpletion conduct; incompetent
- method revenue
I
individuals involved in the
/ recognition. " estimation process.
• Overestimating th'e
' • . Aggressive aitude al
'
percentage of completion . , , management oward
.. on proj~cts by a financial repo ing;
constru~tion company using incompetent personnel .
·,
the percentage-of• . involved in.the estimation
' ' .
completion method of, / accountin g process.
' ,
revenue recognition.
. . '
Intern al Contr ol over Notes Receivable

· As previously stated, a basic characteristic of effect.ive control consists of the

subdivision of duties. As appiied to n~tes rec~ivable, this princip~e requires that:
1

I. The.custodian of_notes receiva,ble nqt have access to cash or to general

accounting,records. , . · '.
2. The acceptance and renewal , of !)Otes be authori~ed in writing by a ·
responsible official who does not have custody of the notes.
.
-
3. The write-o ff of defaulted notes ~e approved in· writing ·by responsible
officials and effective procedures adopted ·for _subsequent follow-up of
such defaulted notes. .
 Internal Control Affecting Assets 25S
INTERNAL C~NTRO L OVER INVENTORIES AND
COST OF GOODS SOLD .. .

The interrela!ions~ip of inventories and c~·st of goods sold makes it logical f~r
the ~o top,_cs to b~ considered together. The cont~ols that assure the fair
valuation _of mventone s are found in the purchases (or acquisition) cycle. These
con~~Is •~elude. _procedures for selecting vendors, ordering merchand ise or
materi~I~, mspectmg g<;>ods received, recording the liability to the vendor, and
authonzm g and making cash disbursements. In a manufacturing business; the
~aloa~ion of !nventori es a_lso is· affected by the production (or conversio n) cycle,
~~ which_ v~ious manuf~cturing costs are as'signed to inventories, a:nd the cost of
mventones ts then·transferred to the·cost o_f goods sold.

Sources and Nature of Inventori es and Co,_t of Go_o ds Sold

The term inventories is· used in this ~hap~er..fo i!')clude:

I. goods on hand ready for ·sale, whether the merchandise of a trading

' concern or th~ finished $Oods of a qianufa,cturer; ·
2. goods in the process of pr9duction; and
3. good to be consume~ directly or _indirectly in production, such as raw
materials,- purchased parts, ·and supplies.

Internal Control over Inventories and Cost of Goods Sold

/!' • • I •

The importance of adequate internal control over 'inventories and cost of goods
sold from the viewpoin t of both management ·and the auditors can scarcely be
overemphasized. ln some companies, management stresses controls over cash
and securities but pays -little attention to control over _inventories. Since many
types of inventories are composed· of items -not particuJarly susce·ptible to theft,
management may consider·controls to be :unnec~'ssary in-this area. Such thinking
ignores the fact that. controls . for invento_ries ~ffect nearly all ~e functions
involved in producing and disposing of the company's products.
/ - -

2S6 Chap ter 16

Potential Mis state men ts - Inve ntor y / Cost of Goo ds Sold

Description of Misstatement Examples Internal Control Weakness or

Factors that lncreo·se the Risk of
the Misstatement
Misstatement_of inventory costs Fraud:

• Intentional misstptement of
production costs assigned • ln~ffective board of
directors, audit rommittee,
to inventory. · or internal audit function;
.. • Intentional misstatement of "tone at the top" not
. inventory prices.· conductive to ethical
· conduct; undue pressure to
J
meet earnings targets.
Errors:
.. The assignment of direct • I
.lneffect.ive cost accounting
labor costs; direct material system; failure ·to update
costs, or factory overhead standard costs on a timely
.. to inventory items is basis.
•.
/
inaccurate. Ineffective input validation
• Erroneous 'pricing of controls on the database of
inventory. inventory costs; ineffective
supervision of the
personnel that enter the
costs on the final iriventory .
· schedule.
Misstatement of inventory Fraud:
quantities
. J

•
',
lte_ms ore stolen with no ·
· journal entry reflecting the
• ·Ineffective physical
h · controls over inventories.

. ,.
.,
theft. , /
I
lpventory quantities in
• Ineffective board.of
directors, audit committee,
locations not visit~d by or internc;il audit•function;
auditors are syste111atically. "tone at the top" not
overstated. conducive to ethical
conduct; ·undue pressure to
Errors: meet earnings targets.
• Mis·counting of inventory by
• Ineffective controls or
personnel involved in
physical inventory. supervision of physical
I
I
. inventory.
 Internal Control Affecting Assets · 257
Early (late) recognition of
Fraud:
purchases - "cutoffproblems".
• Intentional ~ecording of • Ineffective board of
purchases in the directors, audit committee,
subsequent period. or internal audit function;
"tone at the top" not
conducive to ethical
conduct; undue pressure to
Error: meet earnings targets.
•,, Recording purchases of the • Ineffective accotlnfing
current period in the procedures that do not tie
sub.sequent period. recorded purchases to
receiving data.
. .
INTERNAL CONTROL OVER PROPERTY, PLANT AND EQUIPMENT
. .

The term properly, plant and equipment includes. all tangible assets -with a
service life of more than one year that are used. in the operation of the business ·
and are not acquired for the purpose of resale. Three major· s~bgroups of such
. assets are generally -recognized:_ ·
"
1. Land, such as properly. useg in the operation of the business, has the .
significant characteristic of hot being subject to depr~ciation. ·
2. · Buildings, machinery, equipment and land improvements, such. as fences
anci parking lots, have. . limited service lives and are subject to
depreciation.
3. Natural resources (wasting assets), such · as oil wells, coal .mines, and
tracts of timber, are subject to depletion as the natural resources are
extracted or. removed.
/.

Acquisitions and disposals Qf property, plfint and equipmei:it are usually large .in
dollar amount but concentrated in only a few transactions. Individual. items of
plant and equi~ment may remain unchanged in the accounts for many years.
! '

2S8 Chapter 16

·lnternal Control ov~r Plant and Equipment

The amounts invested in plant and equip~ent represents a large portion. of

the
total assets of many industrial concerns. Maintenance, re~rrangement.
and
deprec_iation of these assets are major expenses in the income stat~ment. The
total
· expenditures for the assets and related expenses make strong mternal contro
l
essential to the preparation of reliable financial statements. Errors
in
measurement of income may be materi.al if assets -are scrapped without their
cost
being removed from the accounts, or if the distinction between capital
an~
revenue expenditures is not maintai.ned consistently. The losses that ~nevit
ably .
arise from uncontrolled methods of acquiring, maintaining, and retiring plant
and
equipment are often_greater than the losses from fraud in cash handling.'

In large_enterprises, the. auditors may.expect to find an annual plant budget

used
to forecast and control · acquisitions and retirements of plant and equipment.
Many small companies also. forecast expenditures for plant ass,ets. Successful
u_tilization of a plant budget presupposes the existence of refiable ~nd detail
ed
accounting r~cords for plant and equipment. A detailed 'knowledge of the kinds,
quantities and ~onditiot~ of existing equipment is an ess~ntial basi_s ~or intelli
gent
. forecastii:ig of the need for replacements and additions to .the plant.

.Other key controls ap,plicable to plai:it ~nd:~quipment ~re as follows: -

-
'

I. ·A ·subsidiary ledger consisting of a se·parate record for each unit of

property. An adequate plant and equipment ledger facilitate the auditor's
work in analyzing additions arid retirements, in veri,fying the·depreciation
provision and maintenance expenses, and in co~par_ing. authorizations
with a~tual expenditu~e~; ·
2. A. systc;m of authorization requiring advance executive approval of all
· plant and equipment acquisitions, -whether by purchase, lease or
construction. Serially numbered capital work- orders are a convenient
means of recording authorizations.
, .....
3. A r~porting .procedure assuring prompt disclosure and · analysis of
variances between authorized expenditures and actual costs.
4. An authoritative written statement of company policy distinguishing
between capital expenditures and revenue expenditures. A . dollar
minimum ordin~rily wiH be · established for _capitalization; any
expenditures of a lesser amount automatically classified as charges
against current revenue.
 Internal Control Affecting ~ssets 259

S. A policy requiring all purchases of plant and ·equipment to be hand!ed

through the purchasing department and subjected to a standard routine
for receiving, inspection and payment.
6. Periodic physical inventories designed to verify the existence, location
an? condition· of all property listed i~ the accounts an~ to di~close_th e
existence of any unrecorded units. ·
7• A system of retirement procedures, including serially -)lumbered
~etirement work orders (bottom), stating reasons for retirement ao d
bearin~ appropriate_approvals.

Potential Misstatements~ Inv~stments in Property, Plant and

Equipment
-
' Description of I Examples Internal Control We_akn_ess
·Misstatement or Factors that, Increase the
Risk of the Misstatement -
Misstatement of acquisitions of Fraud:
property, plant and equipment '
• Expenditures for repairs • Undue pressure to meet
and maintenance · - earnings targets.
I
expense's recorded as
property, plant and
equipment-acquisitions to '
· overstate income.
'
Error:
- '
•• Purchases ,of equipment • Inadequate accounting
erroneou~ly reported·in manual; 'incompetent
maintenance and repairs .. accou·nting personnel.
expense account.
Failure to record retireme~ts of Error: I

property, plant and equipment. .

•
An asset that h·as been • Inadequate accounting
replaced is discorded due :policies, e.g., failure to
to its lock of value, use retirement work
without on accounting orders.
entry. •
Improper reporting of unusual -Error:
transactions. •
•. A"gain" recorded on an lnodeq·uate accounting
exchong~ of , manual; incompetent
nonm'onetory assets that . accounti_ng personnel.
locks commercial \
' substance.