Essay about Goodner Brothers, Inc. Internal Control Issues
Internal Control Issues
1.List what you believe should have been the three to five key internal control objectives for Goodner’s Huntington sales office.
1. Assets Safeguard The padlock and other some security are used as a physical protection of Goodner’s inventory from stolen by unauthorized person.
2. Authorization of Transaction Goodner’s policy said that the new customer required an approval of the sale manager for the credit sale. The objective of this policy is to control the authorization of employee by using an approval from the senior manager to determine the credit term of new customer.
3. Top-level reviews Annual review by the internal audit is used in order to inspire the …show more content…
Correct shipping and billing to customers -Reconciliation of sales order and pick up inventories -Use of bar code scanner and RFID tags to record picking and shipping (write off inventory, immediately -Field checks and completeness test if data entries perform manually. -Packing slip and bill of lading should not be printed until accurate shipment has been verified. -Segregating the shipping and billing functions -Sales orders, picking tickets, packing slips, and sales invoices should be sequentially numbered and then periodically accounted for and every shipment is entered into the computer system.
To protect the theft of inventory -Inventories keep in a secure location with restricted access. -Warehouse and shipping employees should sign the document accompanying the goods at the time the goods are transferred from inventory to shipping -Inventory should be released for shipping only with approve sales order. -Wireless communication and RFID tags can provide real-time tracking which help to reduce the theft. -Physical count made periodically or surprised check -The employees responsible for inventory custody should be held accountable for any shortage.
To protect the theft of cash Segregation of duties: -Handing cash or checks and posting