Winternal control important to an organization

Question

Refer to the Professional Judgment in Context feature at the outset of the chapter, which describes the embezzlement at Chesapeake Petroleum and Supply.

a. Why is internal control important to an organization?

b. How does internal control help an organization achieve reliable financial reporting?

c. Why does an external auditor need to know about a client's internal control?

d. What is internal control over financial reporting and what are its components?

e. What type of control is segregation of duties and what risks is that control intended to mitigate?

f. What controls could Chesapeake have implemented that may have prevented the embezzlement?

Answer 1

There as termed as refer to the Professional Judgment in Context characteristic at the outset of the chapter that clarifies the embezzlement at Chesapeake Petroleum and Supply. a. Why is internal control significant to an organization? b. How does internal control assist an organization attain reliable financial reporting? c. Why does an external auditor need to know about a client's internal control? d. What is internal control over financial reporting and what are its components? e. What kind of control is segregation of duties and what risks is that control proposed to mitigate? f. What controls could Chesapeake have implemented that might have avoided the embezzlement?