Answered: uestion 1 : What are your two biggest…

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter14: Auditing It Controls Part I: Sarbanes-oxley And It Governance

Section: Chapter Questions

Problem 2P

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Question 1 : What are your two biggest concerns relating to possible fraud for the motel part of the business? For each concern, generate two or three controls that could effectively reduce risk related to your concerns. Use common sense and be creative! Question 2 : What are your two biggest concerns relating to possible fraud for the café part of the business? For each concern, generate two or three controls that could effectively reduce risk related to your concerns. Use common sense and be creative! Question 3 : Briefly describe the impact each proposed control would have on the efficiency of running the business. Are the controls you generated both effective and efficient? Question 4 : Describe the potential impact of your proposed controls on the morale of the couple in charge of the day-to-day operations. How might Norman deal with these concerns?

City Square Motel - Internal Control system
Key Facts:
Harvey Norman recently invested in a small 40-room motel and
café in a remote tourist area in Gold Coast. Norman lives in
Melbourne, some nine hours from the motel, and only plans to visit
the motel periodically.
> Norman hired a young couple to manage the motel and café. They
will live on-site and will have complete control over daily activities
and record keeping.
Norman is concerned about having little control over the operations
of the motel and café. He has requested help in identifying possible
ways the business could be defrauded and in establishing creative
internal controls to deter such fraud.

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