One of the things you can do in a logical approach to the assessment of internal control is imagine what types of errors could occur with regard to each significant class of transactions. Assume a company has the significant classes of transactions listed below.
For each one, identify one or more errors that could occur and name the accounts that would be affected if proper controls were not specified or followed satisfactorily.
1. Credit sales transactions
2. Raw materials purchase transactions
3. Payroll transactions
4. Equipment acquisition transactions
5. Cash receipts transactions
6. Leasing transactions
7. Dividend transactions
8. Investment transactions (short term)