The Goodner Brothers Case

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1. List what you believe should have been the three to five key internal control objectives of Goodner’s Huntington sales office. The Goodner’s Huntington sales office should have implemented the following internal control objectives: 1. The reliability of financial reporting, which relates to the timely and accurate recording of transaction, and it makes sure that financial reports are reliable and free of material misstatement. In addition, it also deals with the physical security of assets; which means the assets are only used for business purposes and are safeguarded from unauthorized use. 2. Timely feedback on the achievement of operational or strategic goals, which deals with the achievement of the business…show more content…
➢ The company should have a proper check on prospective employees. This means that besides following up on employment references and background check, the company should also do credit check on prospective and current employees and look for significant debt structure, which would raise some warning flags. ➢ The company should establish an independent internal audit team, consist of experience inventory managers. It should also restrict access to employees, whose roles and duties are related to inventory management. Furthermore, it should improve inventory management, particularly related to reruns and defective tires, by having a systems and processes in place that identify inventory requirements, set targets, provide replenishment techniques and report actual and projected inventory status. Finally, it should install security cameras, particularly in the larger storage areas, that would improve physical security of the inventory. ➢ The company should perform periodic performance evaluation on their current employees. It should also update the job description and duties for all the mangers, where they should look for red flag and follow up on customer complaints, particularly if there are significant number of complaints being submitted towards certain employee. ➢ The company should revisit their business strategy and set up more realistic operational and

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