Refer to the Focus on Fraud feature "The Importance of Internal Control for Safeguarding
Assets at Chesapeake Petroleum and Supply, Inc." whichdescribes 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?