What account assigned to you?

The product assigned to me is production cost.

What possible error may occur that will affect the account assigned to you?

There are several errors that could affect product cost. Here are a few examples:

Inaccurate Materials Cost: If the cost of the raw materials used in the manufacturing process is
miscalculated, this can affect the final product cost. For example, if the cost of materials
increases unexpectedly, the product cost will also increase.

Production Errors: If there are errors in the production process, such as defective products or
waste, the cost of production per unit will increase. This can also increase the final product cost.

Overhead Costs: Overhead costs such as rent, utilities, and salaries for employees who do not
directly work on the production line can affect product cost. If these costs are not properly
allocated, the final product cost may be higher than it should be.

What internal control may be implemented to prevent the occurrence of such error?

There are several internal controls that can be implemented to prevent errors that may affect
product cost. Here are a few examples:

Standard Costing: By using standard costing, a company can set predetermined costs for
materials, labor, and overhead. This helps to ensure that the actual costs incurred during
production are consistent with the estimated costs.

Material Requisition Forms: By requiring employees to complete a material requisition form

before using any raw materials, a company can ensure that the use of materials is properly
authorized and that inventory levels are accurately tracked.

Production Planning and Scheduling: By carefully planning and scheduling the production
process, a company can ensure that the right materials and labor are available at the right time,
minimizing waste and maximizing efficiency.

What possible fraud may be committed that will affect the account assigned to you?

There are several types of fraud that can be committed that may affect product cost. Here are a
few examples:

Misappropriation of Inventory: An employee may steal raw materials or finished goods from
inventory, which would increase the cost of goods sold and decrease the company's profits.
Fictitious Sales: A company may record fictitious sales in order to inflate revenues and profits.
This would affect product cost by artificially lowering the cost of goods sold and increasing the
profit margin.

Overstating Inventory: A company may overstate the value of its inventory on its balance sheet
in order to inflate its assets and appear more financially healthy than it actually is. This would
affect product cost by artificially decreasing the cost of goods sold and increasing the profit
margin.

What internal control may be implemented to prevent the occurrence of such fraud?

There are several internal controls that can be implemented to prevent fraud that may affect
product cost. Here are a few examples:

Inventory Controls: Implementing inventory controls such as regular physical inventory counts,
segregation of duties, and restricting access to inventory storage areas can help prevent
misappropriation of inventory.

Sales Controls: Implementing sales controls such as requiring sales orders, credit checks, and
invoice reviews can help prevent fictitious sales.

Expense Controls: Implementing expense controls such as requiring multiple approvals for
expenses, reviewing expense reports, and tracking expenses against budgets can help prevent
understating expenses.