Internal Control And Risk Evaluation Essay

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Internal Control and Risk Evaluation
Kenneth Maxwell
ACC/542
University of Phoenix
Instructor: Ralph Petrillo
Internal Control and Risk Evaluation Kulder Fine Food is looking to run a successful business. It is important that management understand the risks and have appropriate internal controls. In the following paragraphs the risks in the systems Team C provides will be analyzed. After indentifying all risks and internal control point there will be flowchart incorporated into this paper. The student will design internal controls to mitigate risks to the systems. There will be an evaluation of the application of internal controls to the systems. There were will be a discussion of the other controls outside the system needed by Kulder Fine Foods.
Level One Heading
When analyzing risk of Kulder Fine Foods it is important to weigh the pros and cons. Kulder is a large company it is impossible to eliminate and assess every risk. It is important to identify the risks that will be the most detrimental to the company. According to Bagranoff, Simkin & Strand Norman,(2008), “the purpose of risk assessment is to identify organizational risks, analyze their potential in terms of costs and likelihood of occurrence, and install those controls whose projected benefits outweigh their costs”(pg.243). The four systems identified in the Week 2 flow chart was accounts payable, accounts receivable, payroll, and inventory.
The risks associated with accounts payables are invoices being lost in the mail when they are sent to the accounts payable department. The other risks associated with accounts payable are invoices entered incorrectly causing over and under payments. The risks associated with the accounts receivable are over charges by the sales department, misfiling, and misallocation of invoice payments to the incorrect customers account. The risks associated with payroll are incorrect log times by employees, managers not approving time, and error with employees direct deposit. The risks associated with inventory are overabundance of inventory, unapproved purchase orders and incorrect quantities entered into the inventory system.

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