Richie was the Controller at Ralph Malph Enterprises (RME), a publicly traded sales supported Company. He started
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Richie was troubled, because according to the sales representatives and Marion, previous controllers and some of the executive-level management had never felt having formal authorization and review procedures for accounts receivable was important. Richie noted that this "tone at the top," which was lackadaisical (at best), could lead to the perpetration of fraud throughout the organization. Richie realized that the combination of a lack of control procedures and a lax control environment could cause RME to have problems with the SEC due to lack of compliance with the Sarbanes-Oxley Act. He needed to get controls in place quickly, especially since the external auditors were due to arrive in less than three months.
1. Identify three (3) weaknesses in the current accounts receivable process in comparison to the internal controls that you would expect to see present.
2. Name two (2) recommendations to improve the weaknesses identified in #1 above.
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Related Book For
Principles of Macroeconomics
ISBN: 978-0134078809
12th edition
Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster
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