- Submitted by: mherman1685
- Views: 156
- Category: Other
- Date Submitted: 04/27/2013 05:54 PM
- Pages: 2
to: Apollo Shoes Accounts Receivable Department (C-series)
FROM: LEARNING TEAM D
SUBJECT: PROBLEMS FOUND AND THEIR AFFECT ON OUR AUDIT PROCEDURES
CC: ALISA DUMOND
results from test of controls
During Bradley’s test of controls performed in your sales and accounts receivable departments, there were significant deviations discovered that need to be addressed. It has been noted that your business faced financial problems during the fourth quarter of the year. This problem stems from improper record of sales, overstatements, errors in billing resulting in an overcharge/undercharge to your customers, and lack of credit checks on customers resulting in collection problems.
While your business seems to hold adequate control activities, it is lacking employee follow thru and management enforcement of these controls. This needs to be presented to your employees and proper enforcement obligations need to be explained and carried through by your management team. Enforcement will need to include specific instructions in completing these control tasks and specific personnel need to be placed in charge of enforcement and completion of each control task at all times.
While this is being done, we will be contacting all of your customers to ensure account balances are accurate and up-to-date. We will also be requesting the prompt payment of all open accounts exceeding 30 days past due, with the expectation of your immediate follow thru. Along with these phone calls, positive confirmations will be distributed to all customers with $1,000,000+ accounts and negative confirmations will go to those with balances less than $1,000,000. Please contact our team with any questions or concerns regarding our findings or enforcement details. We will be in touch and dates for actions will be provided upon further review.