Essay on Accounting 504 Week 5 Case Study

934 Words Apr 5th, 2016 4 Pages
Case Study
ACCT504 Acct Fin: Managerial Use Analysis
Devry University
Carmeshia Motes
Professor Melinda Howerton
February 7th, 2016

Situation A.
In evaluating the internal control over inventory for the Williams Oil Services Company, an auditor learns that the warehouse receiving clerk is responsible for ordering parts for supply inventory use in drilling services, counts the inventory when received at the dock, records the receipts into the inventory ledger, and takes the annual inventory, No supervisor reviews the receiving clerk’s work.
Missing Internal Control Characteristic:
The important missing factor is that same person is responsible for conducting all the activities of inventory. He or She is responsible for
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Because of the heavy volume, she no longer required the sales team to provide original airline, hotel, or car rental receipts. She told them to just keep their meals under the $100 per day per diem and no receipts were required. She allowed them to use their own credit cards so they could get the frequent flyer points. She required them to turn in a summary of the travel expenses quarterly.
Missing Internal Control Characteristic:
A system requiring proof for travel, boarding, lodging etc. for the recording of travel expenses in order to reconcile the expenses.
Problems of the Firm:
Since there isn’t any proof available for the expenses incurred during the travel so in case of any query related to expenses during audit then the firm will be unable to provide any evidence against such expense due to non-availability of documents. She did not require any receipts or documents for the travels undertaken. She relied on their words of mouth. Instead of submitting documents for reimbursements, after each travel, quarterly report was required to be submitted.
Proposed Solution:
The sales team must submit all the original documents of their travelling expenses along with a report for the purpose of audit. A review of all the expenses incurred by sales team should be taken by the manager of department. Human resources department should also take a review of all the bills submitted by sales team. There should be a travel reimbursement policy which

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