Kudler Fine Foods - Internal Control and Risk Evaluation
Internal controls are an integral part of a company to provide a foundation for a safe, sound and successful organization. According to COSO, “the three primary objectives of an internal control system are to ensure efficient and effective operations, accurate financial reporting and compliance with laws and operations” (COSO, 1999). Proper internal control programs can help Kudler’s managers to make decisions, progress evaluations and mitigate risks, however, all risks will not be able to be eliminated. The following information will provide some insight into the internal controls and risks that Kudler Fine Foods should be aware of. Internal Controls and Risks
The payroll chart clearly defines the process and procedures that will allow for the proper internal controls and risk management. The duties are properly assigned to establish separation of duties, which is a good way of deterring fraud and preventative controls are established to avoid costly human errors. Segregation of duties is established by having four different individuals assigned to different duties for the payroll avoiding giving full control to one person. The individuals who have different roles are the employees, managers, payroll administrator and the outsourced payroll company. Outsourcing payroll is also a preventative control in avoiding the high costs that can incur due to late filings or tax errors, which would be the liability of the outsourced payroll company. Accounts Receivable
Segregation of duties is also an important aspect for accounts receivable. Mitigating procedures should be in place and properly documented and followed to generate the receivable, receipt of payment and collection efforts for delinquent accounts. Accounts Payable
The automation process suggested for accounts payable software that supports e-commerce solutions will help to minimize time-consuming manual labor. Application controls help...
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