Internal Control and Risk Evaluation

Running head: INTERNAL CONTROLS AND RISKS EVALUATION​1

Internal Control and Risks Evaluation

Tonya Bond

ACC/542

November 9, 2015

Milan Havel

Internal Controls and Risks Evaluation

Previously, a brief was issued to the company concerning the Automated Information System (AIS). We, the advisory team, recommended the company invest in National Cash Register (NCR) to purchase a low-cost propriety automation system to improve the Retail Enterprise Management System (REMS) so that Kudler Fine Foods could run smoothly in the operating areas of the business. In this brief, we will analyze the risks in the recommended analysis brief, identify all risks and internal control points by incorporating the controls and risks into a flowchart, design internal controls to mitigate risks to the system, evaluate the application of the internal controls to the system, and discuss other controls, outside the system, that the company may need.

Internal Controls and Risks

​To properly evaluate the risks in the internal control areas of the business, it is important to become familiar with the four systems of inventory control. The four systems of internal control, that are detriment to the success of a business, are inventory, payroll, accounts receivable, and accounts payable (Kudler Fine Foods, 2015). These four systems of internal controls must have accurate and efficient information recorded from each employee to have an accurate revenue availability. Upon evaluation of the internal controls system, it has been determined that key elements are missing from the four systems of internal control.

First, the flowchart of payroll is missing the approval of timecards for the employees. The Human Resource (HR) department should ensure all time is correctly entered into the system. If the HR does not evaluate the timecard processed by the employees, it can become an easy way for timecard theft and fraud to occur from employees. By evaluating the...