TheGroup-Assignment2 - Warrens Sport Supply: Internal...

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Warren’s Sport Supply: Internal Controls and Risks David Maddox, Charissa Shiver, Jessica Story, Chelsea McGehee “The Group” Miller 11:00 9/14/06 Controls Key or Compensating Control Preventive, Detective, or Corrective Control Risk Statement 1 . Kramer approves credit for customers before the sale is made and initials the customer purchase order. Key Preventive Customers with a higher default risk could place orders for amounts above their approved credit limit, resulting in a higher level of uncollectibility. 2. Segregation of duties: -Kramer approves customer credit and Nancy ships and bills -Billing and accounting duties are separated Compensating Preventive Without certain oversight controls, employees have greater opportunity to commit fraud. 3 . Segregation of Duties: - Return requests approving and processing - Adams reviews invoices and support documents for accuracy. Initials invoice. Compensating Detective Without certain oversight controls, errors could go undetected. 4 . Preparing pre-numbered bill of lading forms and pre-numbered sales invoices. Key Preventive & Detective Duplicate documents may exist with the same bill of lading or sales invoice numbers. 5. Matching actual returned merchandise with the return request form. Key
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TheGroup-Assignment2 - Warrens Sport Supply: Internal...

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