Problem $6-1$A $($Algo$)$ Analyzing internal control LO C$1$

Following are five separate cases involving internal control issues.

Required:

For each case, identify the principle$($s$)$ of internal control that is violated.

a$.$ Nori Nozumi posts all patient charges and payments at the Hopeville Medical Clinic. Each night Nori backs up the computerized accounting system but does not password lock her computer.

b$.$ Carla Farah's manager has told her to reduce costs. Carla decides to raise the deductible on the plant's property insurance from $$5,000$ to $$10,000.$ This cuts the property insurance premium in half. In a related move, she decides that bonding the plant's employees is a waste of money because the company has not experienced any losses due to emplovee theft. Carla saves the entire amount of the bonding insurance premium by dropping the bonding insurance.

c$.$ The owner of Super Pharmacy uses a check software$/$printer to prepare checks, making it difficult for anyone to alter the amount of a check. The check software$/$printer$,$ which is not password protected, is on the owner's desk in an office that contains company checks and is normally unlocked.

d Tywin company keeps very poor records of its equipment Instead the company asserts its employees are honest and would never steal from the company.