Goodner Brohers, Inc.
Goodner Brohers, Inc.
1. List what you believe should have been the three to five key internal control objectives of Goodner Brohers’ Huntington sales office.
A. Goodner’s executives should focus more attention on internal control measures rather than volume in order to have operating activities with efficiency. Although sales volume is related to profits, the company could not scrimp on operating expenses. Goodner should make sure there is a good and healthy environment when achieving high sales volume.
B. Make sure Goodner’s policy of employment is sounding. They relied heavily on the honesty and integrity of the employees they hired and never hire someone unless that individual could three strong references, preferably from reputable individuals with connection to Goodner Brothers. Actually, Some employees initially are well performed, but people can change over time.
C. Make sure Goodner’s off-self accounting system is effective and the financing report is reliable. The system was intended for a small business and a hodgepodge of assorted accounting documents. The financial data would sometime be ignored in some degree. Besides, the bookkeeper, the unit’s sales manager and 2 sales reps all had unrestricted access to this system. In fact, the system became unreliable since all of them had the authorizations to use the system.
D. Goodner should take physical inventory in a serious way. The employees treated the annual event as a prelude to their party. Although there is the difference between the physical inventory and the book inventory, the sales manager did not believe and ignored that.
2. List the key internal control weaknesses that were evident in the Huntington unit’s operations.
A. Policy of employment is defective. It was said the company never hire someone unless that individual could three strong references, preferably from reputable individuals with connection. And T. J. and Ross Goodner relied heavily on the honesty and
1. List what you believe should have been the three to five key internal control objectives of Goodner Brohers’ Huntington sales office.
A. Goodner’s executives should focus more attention on internal control measures rather than volume in order to have operating activities with efficiency. Although sales volume is related to profits, the company could not scrimp on operating expenses. Goodner should make sure there is a good and healthy environment when achieving high sales volume.
B. Make sure Goodner’s policy of employment is sounding. They relied heavily on the honesty and integrity of the employees they hired and never hire someone unless that individual could three strong references, preferably from reputable individuals with connection to Goodner Brothers. Actually, Some employees initially are well performed, but people can change over time.
C. Make sure Goodner’s off-self accounting system is effective and the financing report is reliable. The system was intended for a small business and a hodgepodge of assorted accounting documents. The financial data would sometime be ignored in some degree. Besides, the bookkeeper, the unit’s sales manager and 2 sales reps all had unrestricted access to this system. In fact, the system became unreliable since all of them had the authorizations to use the system.
D. Goodner should take physical inventory in a serious way. The employees treated the annual event as a prelude to their party. Although there is the difference between the physical inventory and the book inventory, the sales manager did not believe and ignored that.
2. List the key internal control weaknesses that were evident in the Huntington unit’s operations.
A. Policy of employment is defective. It was said the company never hire someone unless that individual could three strong references, preferably from reputable individuals with connection. And T. J. and Ross Goodner relied heavily on the honesty and