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1.Discuss the internal control weakness in this case.
2.Describe at least 2 possible ways that the foreman could steal from the company.
3.Describe at least 2 possible actions that would correct the internal control weakness.


1.The internal control is a mechanism that enables the organisation to operate efficiently and effectively in accordance with the applicable rules or regulation. In the current case, Alpha Construction Company that has given responsibility to the construction foreman for the task of managing the project and labourers in the site of project.

The weakness of internal control in this case is that the power and duties are concentrated in the hands of the one person. This only that increases the chances of fraud performed by that individual. The existing structure is that the Construction Foreman controls and regulates the work and attendance of labour in the site of project (Knechel and Salterio 2016). The duties that are performed by Foreman are such as keeping of timecard, filling the timesheet that is submitted for making payment and paying of the labourers. The company does not have any structure for cross checking the information provided by the Construction Foreman as correct. This concentration of power in the hands of an individual in the company.


2.The two possible situations in which the Construction Foreman might steal from the Alpha Construction Company are:

  • While managing and keeping of timecard, the foreman may record more number of hours than the actual time worked. This will give the foreman have the extra amount with him without being noticed by any higher authorities. This can be done with collaboration with the labourers (Carson et al. 2016).
  • The foreman is also responsible for employing labourer. In this case, he can register factious labourers and steal the salary of that employee.

This are the manners in which the Foreman might steal from the Alpha Construction Company.

3.The two probable ways that would solve the problem of correction of the system of internal control weakness are:

  • The job roles and duties must be segregated and allocated to more than one individuals and with a proper structure of cross checking system in place.
  • A proper structure of authorization must be introduced and documentation system that will maintained by different individuals.

This action will ensure a good structure for correcting the problem of internal control weaknesses.



Carson, E., Fargher, N. and Zhang, Y., 2016. Trends in auditor reporting in Australia: A synthesis and opportunities for research. Australian Accounting Review, 26(3), pp.226-242.

Knechel, W.R. and Salterio, S.E., 2016. Auditing: Assurance and risk. Taylor & Francis.


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