ACC 290 Week 5 Internal Control Situation Analysis Assignment: Identify 15 areas of concern from an internal control standpoint
Read and review the situation and see if you identify the areas of concern from an account standpoint. There are at least 15 areas of concern from an internal control standpoint. See how many you can find. Note the issue, the reason for picking it and how to fix it.
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The company sells electronic equipment for resale by retail stores and directly to customers at their location. The owner is an engineer who spends more of the time at work in the production area. Since the owner is technical they take pride in their numbers skill and not having taken any accounting. They installed QuickBooks type accounting system and use it to track the business and have never had an accountant prepare statements or audit the work prepared. The owner delegates this work to his office staff. The staff consists of two employees:
- The office manager takes care of the day to day work of the business. The owner has given the manager a company credit card to purchases production supplies and office materials to maximize rewards. The office manager makes all the purchases on the card and reviews the statements and approves it for payment. They use checks as needed and the office manager keeps the checks, which have to be signed by the owner, tucked away in an unlocked desk in their cubicle. The owner gave her a signature stamp for the checks that they keep next to the checks, so it will not get lost. The office manager makes all the deposits of cash and checks when the assistant gives them the deposit slip and cash and checks. They check the math to make sure the totals match before making the deposit
- The office assistant does the following:
- processes all accounts payable invoices, including reviewing the invoice, entering into the system and printing the check for approval
- If there is a direct customer sale they get the product from inventory, collects the sales amount, and adds it to the deposit slip and put money in envelope.
- Adjusts inventory after sale and records revenue and cost of goods
- Opens and sorts mail as well as taking all outgoing mail to the post office
- Files the invoices and prepares the checks for office manager to sign – the office manager stamps each check
- Collect the time cards and enters the hours to be paid and processes the payroll; it is done via direct deposit so no checks are prepared
- Does the bank reconciliation each month and files it with the statements
Course: ACC290 Principles of Accounting I
School: University of Phoenix
- 25/11/2017
- 25