Goodner Brother

Internal Control is a process that was affected by an entity’s board of directors, management, and other personnel to design to provide reasonable assurance regarding the achievement of objectives in effectiveness and efficiency of operations, compliance with laws and regulations, and reliability of reporting (Kurt F. Reding, 2009). Employee Woody Robinson in Goodner Brothers, Inc. was in financial crisis because of the gambling, and the weak internal control systems of Goodner Brothers, Inc. led to Woody take advantages of its shortcomings by stealing large amounts of inventory and selling them to the third parties. Although Woody was punished by law, Goodner Brothers had to reflect on the internal control deficiencies deeply and how these deficiencies impacted company’s profits and reputation. Below I have stated the main internal control objectives of Goodner’s Huntington sales office should have set, the key internal control weaknesses, the control policies to alleviate the control weaknesses, other parties who should be responsible for the inventory losses, Curcio’s Tires’s controls that help to detect their involvement in the fraud, and recommendations to the Goodner Brothers, Inc. Internal Audit Department.

Internal Control Objectives

Sales representative Woody Robinson took advantages of Goodner’s Huntington sales office’s weak control system to steal lots of inventories. So I recommend Huntington sales office should have maintained the following three internal control objectives. First, it should advance its operations objectives. It should set operations objectives that promote the effectiveness and efficiency of the organization’s operations and safeguard inventories against loss. For example, sales office should provide security for its inventory, and be sure that everyone who gets access to the resources is authorized. Second, it should set financial reporting objectives and prevent fraudulent public financial reporting. Sales office should make...