Memorandum To Senior Management: Internal Controls

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IT Internal Control Report Joe Gish ACC/544 November 5, 2012 Elizabeth S. Thornton November 5, 2012 To: Senior Management From: Joe D. Gish, Controller RE: Internal Controls Dear Senior Management: Our internal controls here at Apollo, I believe need to be ascertained once more. Internal controls are vital to our organizations success, as we progress to an elite distributor of shoes in a globalized market. If our internal controls are deficient, then we will have severe problems and adjustments to be done at audit time, which will be detrimental to the whole company. The auditors will test us vigorously to see the state of our organization. The biggest area of concern I see is in our revenue cycle. I wish to do a full…show more content…
In addition, these invoices should have an adequate e-mail/written audit trail to ensure segregation of duties. With this, the human error factor should be eliminated by 99%, with a higher change that each invoice sent to the customers is completely accurate. If the invoices are compliant that should significantly reduce the risk that sales or cost of goods sold are over/understated, thus giving us an accurate financial depiction. This process should also include the quantity ordered, which also need to be verified by the shipping manager. Each process needs an adequate trail to avoid arithmetical errors or typos. This is a long, drawn out process, but it is needed to ensure the accuracy of our financial statements. Finally, I believe there should be a control in place for our credit department. If a customer wishes to be billed on credit, the request must go from sales to the credit department electronically. This way it is easily traceable to avoid bogus…show more content…
When the invoice is submitted the e-mail database must have enough memory to support the constant e-mails. If this is a credit sale, the invoicing department must forward the approval, along with the report to the compliance/accounting department. The accounting department has more access; because each item needs to be verified by them and they also need to verify the credit report is viable. Once they are finishing testing the invoice, they need to comment on the database that the certain individual tested this invoice and it is compliant or noncompliant. There should also be a brief explanation explaining why the transaction is what they deem it

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