Knapp 3.5 Goodner Brothers

KNAPP CASE 3. 5 GOODNER BROTHERS, INC. 1. Internal cover objectives Goodners Huntington sales office should endure implemented a. Separation of duties sales reps like Woody were given unrestricted access to the accounting governance where they could directly enter transactions. Sales reps also had direct access to farm animal depot areas, and often delivered customer orders. b. Physical controls Pad locks served as the guarantor of Goodners inventory. There should discombobulate been stronger security since the value ranged from $300,000 $700,000. c.Monitoring Management should have monitored inventory more often than once a year. Also, throwaways were non alter to accounting records until the year-end inventory was taken. 2. Huntington units operations displayed inside control weaknesses. One main weakness was giving sales representatives so much access. Sales reps did not keep square-toed documentation of sales orders and had direct access to the accounting system. T his gave the internal auditors no way to range sales amounts. Sales representatives also had direct access to inventory storage units. . The Huntington unit should require all sales reps to fill out proper sales order or credit forms. Sales reps should not have direct access to the accounting system access should only be given to the bookkeeper. Sales reps should also not be allowed to make in-person deliveries for customers. 4. Felix Garcia was partly responsible for Goodners inventory loss because he did not properly monitor inventory levels. Al Hunt was also partially responsible for the inventory loss because he dismissed his suspicions that Woody was marketing stolen inventory.