Case Study: Coach Inc.

770 Words 4 Pages
Coach Inc. is exposed to (1) employee theft; an employee may order special items to be stolen, steal items from a normal delivery, or may have the goods delivered to another location if proper inventory controls and segregation of duties are not implemented. (2) Fraud through the falsification records and a purchase inventory orders; an employee could be creating bogus invoices in order to request payment from Coach and keeping the money for personal use. (3) Theft and financial fraud; an employee in charge of accounts receivables could be embezzling money by posting a customer’s payment on another customer’s account and keeping the money instead of posting it to the accounts receivable account or a manger might be understating inventory balances …show more content…
(2) I will ensure that the receipt of materials into the perpetual records is also done by different staff member and that a copy of the receipt document is attached to the invoice and that is verified against the purchase order. (3) I will select a sample of vendor invoices and inquire about the vendor’s company name, address and type of business through an internet search engine or phone book and compare my findings of the companies with the information on the invoices. (4) In case I am unable to locate any vendor trough a search engine or telephone book I will call the phone number provided on the invoices and ask about business hours, product availability, and other matters. (5) I will run a report to show payments made to vendors and payments due to vendors to reconcile the amounts posted on the bank statement with the amounts recorded on accounts payable. Furthermore I will select the top twenty five high value vendors and verify their legitimacy with the Better Business …show more content…
(1) I will observe appropriate segregation of duties involving the person in charge of receiving the payment and the person in charge of updating the account receivable balances. (2) I will select a sample of customers paid invoices to calculate the average time for payment of invoices, inquire about late payment notices or collection notices sent from Coach to customers and contact customers to verify if previously payment was made to Coach. (3) I will ensure all invoices are stamped as paid, and compare the check number received and name against the account receivable log. (4) Lastly I will request a copy of the checks deposited on Coach Inc. bank account directly from their banking institution and ensure that the name and the amount of the check matches with the invoice and account receivable

Related Documents