Go Go Corporation
Tasha McIntyre Ray
Go-Go Corporation Internal Controls
Accounting Information Systems
Brandman University
As an external audit supervisor assigned to Go-Go Corporation it is my job to evaluate the effectiveness and accuracy of the company’s financial reporting process. To do this I have met with the key financial controlling personnel of the company along with reviewing the accounting policies, controls and operational system currently in place. This is similar to what the internal auditors that report to Go-Go Corporation’s audit committee, but with an objective point of view. In this report I will discuss the potential problems I discovered in my review in regards to the health of the internal environment of the company. Along with the findings I will analyze the effects these issues might have on the financial outlook. Lastly I will support my review using internal environment concepts. Let’s now take a look at what I believe to be some of the potential problems discovered in my preliminary review.
The internal environment of an organization has direct influence on how strategies and objective are established, business activities are structured and risk is identifies assessed and responded to (Romney & Steinbart, 2012, p 188.). Financial failure is often the result of a weak internal environment. My meeting with Go-Go Corporation’s audit committee raised some red flags since it did not consist of outside independent directors. The company’s financial vice president is one of three family members that control all management authority. Public companies are required to have outside, independent directors on the committee but a key position is the brother of chief executive officer and the president (Romney & Steinbart, 2012, p.189). I have also noted that the treasurer on the committee is the former aid to convicted fraud criminal Ernie Eggers. These issues inside Go-Go Corporation’s audit committee undermine the creditability of its
Go-Go Corporation Internal Controls
Accounting Information Systems
Brandman University
As an external audit supervisor assigned to Go-Go Corporation it is my job to evaluate the effectiveness and accuracy of the company’s financial reporting process. To do this I have met with the key financial controlling personnel of the company along with reviewing the accounting policies, controls and operational system currently in place. This is similar to what the internal auditors that report to Go-Go Corporation’s audit committee, but with an objective point of view. In this report I will discuss the potential problems I discovered in my review in regards to the health of the internal environment of the company. Along with the findings I will analyze the effects these issues might have on the financial outlook. Lastly I will support my review using internal environment concepts. Let’s now take a look at what I believe to be some of the potential problems discovered in my preliminary review.
The internal environment of an organization has direct influence on how strategies and objective are established, business activities are structured and risk is identifies assessed and responded to (Romney & Steinbart, 2012, p 188.). Financial failure is often the result of a weak internal environment. My meeting with Go-Go Corporation’s audit committee raised some red flags since it did not consist of outside independent directors. The company’s financial vice president is one of three family members that control all management authority. Public companies are required to have outside, independent directors on the committee but a key position is the brother of chief executive officer and the president (Romney & Steinbart, 2012, p.189). I have also noted that the treasurer on the committee is the former aid to convicted fraud criminal Ernie Eggers. These issues inside Go-Go Corporation’s audit committee undermine the creditability of its
References: "About Us." Oregon.gov. N.p., n.d. Web. 6 June 2013. <http://www.oregon.gov/ODOT/CS/EXTERNALAUDITS/Pages/about_us.aspx> "External Audit Branch." North Carolina Department of Transportation. N.p., n.d. Web. 6 June 2013. <http://www.ncdot.gov/about/regulations/oig/external.html>. Romney, Marshall B., and Paul John. Steinbart. "Control and Accounting Information Systems." Accounting Information Systems. 12th ed. Upper Saddle River, NJ: Prentice Hall, 2012. pp.188-196.