Account Internal Control

Topics: Sales, Revenue, Customer service Pages: 4 (1061 words) Published: August 26, 2012
Internal Control Cases

1.Bern Fly Rod Company

Analyze Bern’s situation and assess any potential internal control issues and exposures. Discuss some preventive measures this firm may wish to implement?

The situation happen when Bern Fly Rod Company given all job to the salesperson to do the activity for this company and potential internal control issues of exposures and risk. The issues comes when the salesperson theft of the asset, it happen when this person manipulate the financial statement with on the December year end reflect an unprecedented jump sales for the month of October (35 percent higher than the same period in the previous year) because travel expenses ends on October 31. Also when sales recorded, the shipping department delivery to the customer without attention from higher management that should check the invoice first before approves. So the person can take the asset and commission without supervision from the responsible management. Other than that, the salesperson made corruption of information or information. It happen when he made corrupt in disbursement department with manipulate amount from the order and take the commission before the commission amount is calculated and promptly paid. Also the issues is when the salesperson disruption of information system. This person each week submit a hardcopy spreadsheet of expenses incurred to the cash disbursements clerk, the clerk immediately writes a check to salesperson for the amount indicated in the spreadsheet.

The solution for this problem that Bern’s company can do, first this firm must monitor all activities happen. This relates with the higher level management must monitor about their workers when the doing transaction with customer. It will help this firm to observe the salesperson not to manipulate the ordering transactions when dealing with the customers. Other than that firm can use the control activities. Physical control is control that relates primarily to the human...
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