Internal Control and Risk Evaluation

Kudler Fine Foods Internal Control and Risk Evaluation

Kimberly Walkes

ACC/542 Accounting Information Systems

January 30, 2012

Brad M. Thompson

ABSTRACT

Kudler Fine Foods is a gourmet food chain that specializes in domestic and international foods and gourmet utensils. Currently, Kudler Fine Foods has 3 stores located in California and looking to expand and grow in the future. Along with growth, Kudler would need to improve the current REM system. The owner, Kathy Kudler along with her management team, received reccommendations from PKL Accounting Services, in regards to acquiring an Accounting Information System. After reviewing the brief and flowcharts provided, Kudler’s management team requested information on controls that will be required. The brief will analyze the risk associated in the system, the flowchart provided by PKL Accounting Services will be expanded to incorporate the controls and risk, design internal controls to mitigate risk, evaluate the application of internal controls to the system and discuss other controls, outside the system that may be needed.

For many companies, the thought of undergoing an implemeatation of a new AIS can be daunting. The risk associated with a system implementation causes many companies to continue using their current system. Kudler enlisted the services of PKL Accounting Service to recommend a AIS. PKL recommended a industry-specific software. Although other companies are using this system, Kudler still has risk. The software and hardware will need to be installed, so there’s an IT timing risk. The lack of user experience is another risk Kudler will face. Kudler will most likely create a project team who will make decisions regarding the system but may not be in line with the organization. PKL Accounting Service also recommended Kudler should prioritorize the implementation of the four main systems by starting with automating the inventory portion because of the many manual processes. Now...