You are a forensic accountant and was recently hired by Yummy Pizza (YP) to look into the possibility that fraud has been taking place as the company has the company's profits  have  been dropping significantly over the past 2 years.  YP is a national restaurant chain offering pizza and other Italian food items for delivery and pick up at over 300 locations. 

You initially review the call centre operations for the company. . The call centre is in Montreal with 100 agents taking English and French food orders during business hours. You have been observing the agents and have made the following observations: 

The agent will log into the Foodie system by entering in their last name. This will activate the phone and Foodie, the food ordering system. The agent will log off of Foodie when they go off to lunch or break. Once the phone is activated, calls will be automatically routed to the phone. 

The agent will answer the phone and ask the customer for their phone number in order to pull up the customer`s profile, which includes their address, previous food orders and credit card information which allows for quicker processing of the order. All this information is entered if it is a first time customer. 

The customer`s order is placed in the system and the order is either charged to the credit card on file, noted as cash payment on delivery, cash payment on pick-up at store or no charge. No charge or free food can be granted by the agent if the customer was dissatisfied about the current order or a past order.  

You notice that there is a lot of variability in how the agents perform. Some calls will take 2 minutes while others take up to 5 minutes. Those agents that take longer will confirm order details back to the customer, try to sell additional food items such as soda or dessert and will thank the customer for their continued business.  

In a review of the phone statistics, you notice that Luc Sorbonne, a long-time employee, has logged off his phone for almost four hours each day. When you ask the supervisor if hours are docked for Luc, their response is that Luc is paid based on his time card of punching in and out for work. They don`t want to micromanage him as he does a good job handling calls. 

Phone statistics also reveal that wait times for customers on hold before connecting to an agent is between 4 and 10 minutes.   The company has a five minute guarantee for their call to be answered or their order is free. The phone statistics are reviewed annually by the call team managers, which has resulted in improved training for new employees. 

You perform a sample of test calls and noticed that sometimes your calls get disconnected while you are on hold. You also notice that during the call, there are loud clicking noises that make hearing the agent difficult. The reason is that there was a system change to the Foodie system that had not been fully tested as there was a change in IT staff during the system change.

 

Required:

• Based on case facts identify five (5) internal control weaknesses and discuss their impact to the organization. Provide a recommendation for improvement for each of the internal control weaknesses identified.
• Description of internal control weaknesses 
• Impact to the organization 
• Recommendation for improvement
• The company is considering outsourcing its call centre to Costa Rica. Identify four (4) potential risks that you anticipate the company will need to consider with this move. 

Answer rating: 100% (QA)

Internal Control Weaknesses a Lack of Time and Attendance Control The fact that Luc Sorbonne is able to log off his phone for almost four hours each day without any consequences indicates a lack of ti... View the full answer