Goodner Brother Inc Essay

1. Key internal delay objectives of Goodners Huntington Sales Office a. Controls should be able to prevent and keep an eye on fraud. Authorization should be required for every sales transaction. Woody would non be able to sell returned tires from customers and consignees for his own benefits if all sales proceedings needed prior managements thanksgiving. b. Controls should aim at safeguarding forcible assets. Sales Office should ensure that only certain authorized force out could get access to the warehouse and at any time tribute should be enforced to minimize inventory shortages and shrinkages c. Controls should ensure the completeness and accuracy of be records. Woody would charge merchandise that he sold for his benefit to the accounts of prodigious volume customers. Or in other words, Woody has altered the character of the transactions by inflating the number of tires the customers actually ordered.2. Key internal underwrite weaknesses that were evident in the Hunting ton unit of measurements operations a. Strong conviction on the h wholenesssty and integrity of the employees they hired. The company recruited its personnel basing off references and recommendations up to now this practice could not make up for the lack of a powerful internal control system. b. Insufficient personnel. Its crew of 10 to 12 mess had to staff its 14 sales outlets. Many of Goodners personnel had to recognise on double positions such as Goodners secretary who worked as both the receptionist and the bookkeeper. c. Unrestricted access to the accounting system by the units sales manager and two sales representatives.This gave Woody a good opportunity to commit fraud. d. Lack of security for its tire inventory, which typically ranged from $300,000 to $700,000 per each sales outlet. 3. Control policies or procedures to alleviate the control weaknesses set in question 2 a. Authorization of transactions Management approval should be required on all transactions. Otherwi se, the tire purchase need 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 individual should receive and put the returned items gumption to stock.