Case Study 2
Due by Sunday of Week 5, 11:59 p.m., Mountain time
(Learning Objectives 2, 4: Explain the objectives of internal control; evaluate internal controls) Each of the following situations reveals an internal control weakness:
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 ...view middle of the document...
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.
Situation c. Michael Jordon is a new employee hired from Craig’s List recommended by a co-worker. Mike was hired as a Human Resource Assistant. Mike’s first day on the job he is told that he should follow his own judgments when deciding how employee issues such as hiring and firing of employees, sexual harassment, and ethical infractions should be handled.
Top of Form
* 1. Identify the missing internal control objective in each situation.
* 2. Identify each firm’s possible problem.
* 3. Propose a solution to the problem.
Bottom of Form
Category | Points | Description |
Understanding | 10 | Demonstrate a strong grasp of the problem at hand. Demonstrate understanding of how the course concepts apply to the problem. |
Analysis | 30 | Apply original thought to solving the business problem. Apply concepts from the course material correctly toward solving the business problem. |
Execution | 10 | Write your answer clearly and succinctly using strong organization and proper grammar. Use citations correctly. |
Total | 50 | A quality paper will meet or exceed all of the above requirements. |