Exercise $8-1($Static$)$ Identifying internal control failures LO C$1$

dentify the internal control principle that was violated in each of the following separate situations.

Situations

Principle Violated

a$.$ The recordkeeper left town after the owner discovered a large sum of money had disappeared. An audit found that the recordkeeper had written and signed several checks made payable to his fianc$$e and recorded the checks as salaries expense.

b$.$ An employee was put in charge of handling cash. That employee later stole cash from the business. The company incurred an uninsured loss of $$184,000.$

Separate recordkeeping from custody of assets

c$.$ There is $$500$ in cash missing from a cash register drawer. Three salesclerks shared the cash register drawer, so

Insure assets and bond key employees the owner cannot determine who is at fault.

Establish responsibilities