Case Study: Embezzlement at Sanchou College
2. What internal control procedures would you recommend to remedy the control deficiencies related to tuition receipt and refund procedures?
Firstly, I would recommend actions geared towards safeguarding the college’s assets, as well designed internal controls protect assets from accidental loss or loss from fraud (especially as it regards to the acquisition of tuition receipts and the ensuing disbursement of funds). Secondly, the reliability and integrity of financial information garnered by the FSD, and the information held by the different schools of the college must be ensured. Management must have accurate, timely and complete information, including accounting records, in order to plan, monitor and report business operations. Additionally, compliance is a key component to this process. Sanchou College must be in compliance with the many federal, state and local laws and regulations affecting the operations of their business actions. Lastly, it is my recommendation that the college seek to promote efficient and effective operations. This will provide an environment in which managers and staff can maximize the efficiency and effectiveness of their operations.
3. How does the tone set up by top management influence the effectiveness of internal control?
The tone set by top management- the corporate environment or culture within which financial reporting occurs- is the most important factor contributing to the integrity of the financial reporting process and the subsequent fiscal environment at Sanchou College. Monitored operations, clear set goals and objectives, adhering to proper protocol and the promotion of reliability and integrity all positively influence the effective internal control.
4. What changes, if any would you make if you were the president of Sanchou?
As president, it would be imperative to establish proper protocol within as well as alongside departments. Such...
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