Atlanta Home Loan - Case Study Essay

952 Words Jan 10th, 2014 4 Pages
Question 5
Atlanta Home Loan – control failure

Date: October 29, 2013

To: Mr. Al Fiorini
Founder of Atlanta Home Loan (“AHL”)

From: PT
Consultant

Subject: Strategies and the Importance of Setting-up Controls for Your Business

Thank you for providing the background information of your company. Based on the information provided, there appears to be deficiencies in the control systems implemented within the operation. These control deficiencies were one of the main causes that allowed unintended individuals to gain unlawful control over Atlanta Home Loan. In order to prevent this from happening again, it is important to identify the main issues that caused the company to fall, generate alternatives to apply in the
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AHL should to consider strengthening your action controls by implementing the electronic links to the processors’ files so you can see the entire loan application process remotely instead of only checking the status at the loan officers’ level. In addition, Segregation of duties should be enforced by having separate individual personnel handling loan applications, loan submissions, paying office expenses, human resources, approving payments, and signing checks, etc. This would require the coordination of personnel controls which helps an organization find the right people, giving them a good working environment and the necessary resources to do their work. AHL should have a trained recruiting manager or an experienced staff to conduct the hiring and firing process. In addition, AHL should continue to establish a more effective motivational compensation plan (through its result controls) that not only rewards the outperforming staff, but also encourages synergy and goal congruence for the organization. This will be complemented through the implementation of cultural controls. AHL can set company code of conducts and statements of values, create an ethical tone at the top and promote employees in thinking more socially responsible. A company’s culture can unite its employees or attract new employees as they share a similar set of values. The alternative controls in place could

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