Goodner Brother Inc Essay

1. tell internal fancy objectives of Goodners Huntington sales postal service a. Controls should be able to balk and detect fraud. Authorization should be necessary for every sales transaction. arborescent would non be able to sell returned tires from customers and consignees for his avouch benefits if all sales transactions need prior managements approval. b. Controls should order at safeguarding physical assets. Sales Office should ensure that only certain accepted military group could get access to the store and at any time gage should be enforced to minimize instrument shortages and shrinkages c. Controls should ensure the completeness and accuracy of accounting records. Woody would charge merchandise that he change for his benefit to the accounts of large volume customers. Or in other words, Woody has modify the nature of the transactions by inflating the do of tires the customers actually ordered.2. Key internal control weaknesses that were evident in the Hun tington units operations a. Strong reliance on the h iodinsty and integrity of the employees they hired. The company recruited its personnel basing off references and recommendations however this practice could not make up for the lack of a strong internal control system. b. meager personnel. Its crew of 10 to 12 mickle had to staff its 14 sales outlets. many an(prenominal) of Goodners personnel had to take on double positions such as Goodners depositary who worked as both the receptionist and the bookkeeper. c. unexclusive access to the accounting system by the units sales film director and two sales representatives.This gave Woody a good opportunity to commit fraud. d. neglect of security for its tire inventory, which typically ranged from $300,000 to $700,000 per to each one sales outlet. 3. Control policies or procedures to unbosom the control weaknesses identified in research 2 a. Authorization of transactions solicitude approval should be required on all transaction s. Otherwise, the tire purchase postulation should be made by one individual and got approved by a different one. b. Segregation of duties The secretary should not act as both the secretary and the receptionist. Report on returned items should be generated by one individual and then another(prenominal) individual should receive and put the returned items stake to stock.