Biltrite Module 1

2488 Words Mar 30th, 2011 10 Pages
Module I - Assessment of Inherent Risk

1. See Figure BR.A-Biltrite’s organizational chart. Based on the chart and the case description, the following strengths and weaknesses should be identified:

STRENGTHS:

• The structure shows adequate separation within the CBIS function, i.e., systems analysis and programming are separate from data processing and control (implications for control risk assessment) • Separation is also maintained between the accounting and finance functions (implications for control risk assessment). • The internal audit staff is competent (but see weaknesses below, implications for control risk assessment). • The corporate controller’s former affiliation with the accounting firm enables him
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| | | | |
| |Year Ended |Percent |Year Ended |Percent |
|MANUFACTURING OVERHEAD |12/31/2009 |of Sales |12/31/2008 |of Sales |
| | | | | |
|Indirect Labor |$5,500 |1.64% |$5,300 |1.89% |
|Depreciation of Factory Building |$2,000 |0.60% |$2,000 |0.71% |
|Depreciation of Factory Equipment |$42,060 |12.56% |$42,860 |15.31% |
|Property Taxes |$6,000 |1.79% |$5,800 |2.07% |
|Manufacturing Supplies |$15,042 |4.49% |$14,600 |5.21% |
|Payroll Taxes and Fringe Benefits |$13,200 |3.94% |$12,400 |4.43% |

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