2. List the key control weaknesses that were evident in the Huntington unit's operation.
3. Develop one or more control policies or procedures to alleviate the control weaknesses you identified in responding to question 2.
4. Besides Woody Robinson, what other parties were at least partially responsible for the inventory losses Goodner suffered? Defend your answer.
1. List what you believe should have been the three to five key internal controls objectives of Goodner's Huntington sales office.
- Segregation of duties between members that initiative, approve, implement, and record
- Procedures to authorize transactions
- Requirements for documentation and audit trail before processing transaction
- Limitation to physical access
- Independent reconciliation
In this case, here are the key controls that would have been helpful:
- The tires were not secured physically to minimize theft - access should be limited (locks).
- Any shortages should be identified and followed up in a timely manner.
- Purchases and sales returns should be authorized by a ...
Woody Robinson and Al Hunt were lifelong friends. Following graduation from college, Al went to work for his father-in-law, who owned Curcio's Auto Supply, a retail business located in Huntington, West Virginia. With the help of Al, Woody landed a job with one of Curcio's major suppliers, Goodner Brothers, Inc., a tire wholesaler. Goodner Brothers sold tires from fourteen sales offices scattered across the Midwest and the eastern seaboard. Woody worked as a sales representative for the Goodner sales office in Huntington. ...... (see case for full story).....
Your tutorial is 417 words and gives you examples of controls missing or not working, ideas about how to fix it and other parties besides Woody that contributed to the problem(s).
This is NOT summary of the embezzlement and includes weaknesses as "bullet points" so you can write it up in your own words.