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The accountant has recently started using pre-numbered invoices and
wants to buy an indelible ink machine to print their checks. The
President is waiting to hear from you if this is a necessary purchase
before authorizing.
On payday, the checks are picked up by the accountant and left in his
office for pick-up. Before he leaves for the weekend, he will move the
checks into a safe in his office.
The President is still quite embarrassed because he had to fire one of his
employees for viewing pornography on a company computer. He later
found out this individual was a convicted felon who served time for
molesting children. The company had a hard time getting the employee
to admit it was him because the company does not assign individual
passwords. The President expressed his frustration because both he and
the accountant both interview and approve all of the new hires.
Required:
Based on the above information, prepare a Word document to address
the following:
Inform the President of any new internal control requirements if the
company decides to go public. (7 points) Advise the President of what
the company is doing right (they are doing some things well) and also
recommend to the President whether or not they should buy the indelible
ink machine. When you advise the President, please be sure to reference
the applicable internal control principle that applies. (13 points) Advise
the President of what the company is doing wrong (they are definitely
doing some things poorly). Please be sure to include the internal control
principle that is being violated along with a recommendation for
improvement. (20 points)
You must prepare a formal report for the partner to distribute to the
President so no abbreviations or short-hand answers. You also must cite
your references. At a minimum, your textbook should be cited.
Below is a grading rubric for this assignment.
Category
Points
Description
Understanding