Design a simple set of Internal Controls for Samsonite.
Guidelines
The purpose of this assignment is to provide a simple set of internal controls that would protect and safeguard the company’s assets from theft or fraud; ensure continued reliability of the company’s accounting system and ensure that management objectives are implemented and executed as designed. The following must be included in your submission:
1. Brief introduction of the selected Company should include:
o Name of company.
o Nature of business.
o Type of goods and services o Fiscal Year
2. There are four categories listed below. Under each category, you will find the different sub-processes based on Financial Accounting information. You need to identify two controls that should be implemented to protect and safeguard the assets of the company for each sub-process.
o Entity-Level Controls
Governance;
control environment;
risk assessment;
information and communication.
o Financial Management Processes
Budgeting and Forecasting;
Investment Planning
o Financial Reporting Processes
Financial Statements and Year-end Reporting
Revenue, Receivables, and Receipts Purchasing, Payables, and Payments
Contracts
Payroll
Capital Assets
o Information Technology General Controls
Access Management
Change Management
Computer Operations
3. Based on the template provided, you will need to identify a control objective for each sub-process based on the key control activity; identify the potential risk to the organization for each sub-process and how would you classify the risk – High? Medium? Low? Recommend a possible testing strategy.
4. The submission should be in Excel format as per the attached template.
Please include citations and references.
Thank you!
Company Name: Samsonite Nature of Business: Samsonite is a leading global manufacturer and retailer of travel luggage, bags, and accessories. The company designs, produces, and markets a wide range of travel products for both leisure and business travelers. Type of Goods and Services: Luggage, bags, travel accessories Fiscal Year: Calendar year (January 1st – December 31st)
Ensure the board of directors provides oversight and guidance to management on internal controls, risk management, and financial reporting. Potential Risk: Lack of board involvement may lead to inadequate control implementation or oversight, increasing the risk of fraud and mismanagement. Risk Classification: Medium Testing Strategy: Periodically review board meeting minutes to ensure discussions related to internal controls, risk management, and financial reporting are documented.
Control Environment
Control Objective: Foster an ethical culture within the organization by setting clear expectations, promoting integrity, and emphasizing the importance of internal controls. Potential Risk: Weak ethical culture can encourage fraudulent activities, non-compliance, and lack of accountability. Risk Classification: High Testing Strategy: Conduct anonymous employee surveys to gauge their perception of the organization’s ethical culture and control environment.
Financial Management Processes: 1. Budgeting and Forecasting: Control Objective: Ensure accurate and realistic budgeting and forecasting processes to allocate resources effectively and monitor performance. Potential Risk: Inaccurate budgeting may lead to overspending, inadequate resource allocation, and hinder the company’s financial stability. Risk Classification: Medium Testing Strategy: Compare actual financial performance against forecasted figures regularly to identify significant discrepancies.
Investment Planning: Control Objective Implement a structured investment evaluation process to assess potential projects, ensuring alignment with strategic goals and risk-return profile. Potential Risk: Poorly evaluated investments can result in capital misallocation and reduced return on investment. Risk Classification: Medium Testing Strategy: Review historical investment decisions and analyze their outcomes in relation to projected returns and actual performance.
Financial Reporting Processes: 1. Financial Statements and Year-end Reporting: Control Objective: Ensure timely and accurate preparation of financial statements, adhering to relevant accounting standards and disclosing material information. Potential Risk: Inaccurate financial statements can mislead stakeholders, damage the company’s reputation, and result in legal and regulatory penalties. Risk Classification: High Testing Strategy: Perform a walkthrough of the financial reporting process and compare the final statements to supporting documentation.
Implement controls to accurately record sales transactions, promptly collect receivables, and properly document receipts. Potential Risk: Improper revenue recognition and delays in receivables collection can distort financial results and impact cash flow. Risk Classification: High Testing Strategy: Select a sample of sales transactions and trace them from the point of sale to recording in the financial system.
Information Technology General Controls: 1. Access Management: Control Objective: Ensure proper access controls to IT systems, limiting user access to only the data and functions necessary for their roles. Potential Risk: Unauthorized access can lead to data breaches, fraud, and compromise of sensitive information. Risk Classification: High Testing Strategy: Conduct a review of user access rights, comparing them against employees’ job roles and responsibilities.
Implement a structured change management process to track and approve modifications to IT systems, minimizing the risk of unauthorized changes. Potential Risk: Unauthorized system changes can result in data corruption, system instability, and security vulnerabilities. Risk Classification: Medium Testing Strategy: Review change logs and documentation to ensure that all system changes followed the approved change management process.
In conclusion, implementing a robust set of internal controls is vital for Samsonite to safeguard its assets, ensure accurate financial reporting, and uphold ethical standards. By addressing key control objectives within entity-level controls, financial management processes, financial reporting processes, and information technology general controls, the company can mitigate risks and enhance its overall control environment. Regular testing and review of these controls will contribute to the company’s continued success and reliability.
As a renowned provider of the best writing services, we have selected unique features which we offer to our customers as their guarantees that will make your user experience stress-free.
Unlike other companies, our money-back guarantee ensures the safety of our customers' money. For whatever reason, the customer may request a refund; our support team assesses the ground on which the refund is requested and processes it instantly. However, our customers are lucky as they have the least chances to experience this as we are always prepared to serve you with the best.
Plagiarism is the worst academic offense that is highly punishable by all educational institutions. It's for this reason that Peachy Tutors does not condone any plagiarism. We use advanced plagiarism detection software that ensures there are no chances of similarity on your papers.
Sometimes your professor may be a little bit stubborn and needs some changes made on your paper, or you might need some customization done. All at your service, we will work on your revision till you are satisfied with the quality of work. All for Free!
We take our client's confidentiality as our highest priority; thus, we never share our client's information with third parties. Our company uses the standard encryption technology to store data and only uses trusted payment gateways.
Anytime you order your paper with us, be assured of the paper quality. Our tutors are highly skilled in researching and writing quality content that is relevant to the paper instructions and presented professionally. This makes us the best in the industry as our tutors can handle any type of paper despite its complexity.
Recent Comments