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Posted: November 19th, 2022
Research paper (Financial accounting)
Scenario One of your friends has opened a new wholesale electronics business and wants your help figuring out some inventory issues they are facing. One night last week, there seemed to be fewer HD televisions in the warehouse than they expected. The last time they were in the warehouse was a week earlier, and they hadn’t noticed anything amiss. As they looked around, they saw that the evening warehouse worker was filling the last orders of the day. The delivery driver and day warehouse worker were gone for the day, and the delivery van keys were on the desk that the warehouse workers shared. The doors to the loading dock were open, as was the door to the office area where the accountant, two customer service specialists, and the owner worked. Knowing that you are familiar with accounting principles, they asked for your help in figuring out how to prevent this in the future. Prompt Based on what you have learned about internal controls, provide recommendations on what controls the business owner should put in place to prevent loss of inventory and ensure that any losses are reported immediately. Also, specify which parts of the financial statements are affected by these losses. Specifically, you must address the following rubric criteria: Role of Internal Controls Explain the role of internal controls in business settings. Also explain how not having internal controls in place may impact the accurate analysis of any wrongdoing. Recommendations Recommend at least two internal controls that should be put in place to prevent inventory from going “missing,” noting any assumptions you are making about the root cause of the missing products and how your recommendations will help address them. Recommend at least one control that should be put in place to alert the owner if something is actually missing. Financial Statements If you found that two $400 HD televisions were missing, explain which financial statements you would correct and how. Be specific as to accounts and amounts. Citations and Attributions Support your response with cited sources using APA style. Guidelines for Submission Submit a 1- to 2-page Word document with 12-point Times New Roman font, double spacing, and one-inch margins. Sources should be cited according to APA style.
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