ACC504 Case Study 2

Case
Study 2
Due by Sunday of Week 5, 11:59
p.m., Mountain time

P4-57B
(Learning Objectives 2, 4: Explain
the components of internal control; evaluate internal controls) Each of the
following situations reveals an internal control weakness:
Situation
a. In evaluating the internal control
over cash payments of Yankee Manufacturing, an auditor learns that the
purchasing agent is responsible for purchasing diamonds for use in the
company’s manufacturing process, approving the invoices for payment, and signing
the checks. No supervisor reviews the purchasing agent’s work.
Situation
b. Rachel Williams owns an
architectural firm. Williams’ staff consists of 19 professional architects, and
Williams manages the office. Often, Williams’ work requires her to travel to
meet with clients. During the past six months, Williams has observed that when
she returns from a business trip, the architecture jobs in the office have not
progressed satisfactorily. Williams learns that when she is away, two of her
senior architects take over office management and neglect their normal duties.
One employee could manage the office.
Situation
c. Mike Dolan has been an employee of
the City of Southport for many years. Because the city is small, Dolan performs
all accounting duties, in addition to opening the mail, preparing the bank
deposit, and preparing the bank reconciliation.
Top of Form

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Requirements
1. Identify the missing internal control characteristic
in each situation.2. Identify each firm’s possible problem.3. Propose a solution to the problem.
Bottom of Form

Category

Points

Description

Understanding

10

Demonstrate
a strong grasp of the problem at hand. Demonstrate understanding of how the
course concepts apply to the problem.

Analysis

30

Apply
original thought to solving the business problem. Apply concepts from the
course material correctly toward solving the business problem.

Execution

10

Write your answer clearly and succinctly using
strong organization and proper grammar. Use citations correctly.

Total

50

A
quality paper will meet or exceed all of the above requirements.