...Kudler Internal Control & Risk Evaluation In order for a company to be successful and maintain its integrity, internal controls are necessary. If Kudler should decide to utilize industry-specific software, then the company would need to evaluate the internal controls and risks associated with the four systems (payroll, accounts payable, accounts receivable, and inventory). Currently the company does not have any real controls in place to reduce risks. The following information will discuss Kudler’s current internal control risks, ways in which to mitigate those risks to the systems, and evaluate the application of internal controls to the new accounting system. Risks in the System Managing risks is an ongoing process. When considering information technology, and Kudler’s new information system, there are four types of risks to evaluate: business risks, audit risks, security risks, and continuity risks. Kudler’s business risk would be whether the company achieved the goals set for the business. The audit risks would be if the auditor provided accurate a correct opinion that Kudler’s financial statements were accurate and reliable. Security risks involve the integrity of the company. Continuity risks would be if the accounting system had backup and recovery available. In the new payroll system each employee’s time should continue to be entered into the system and be approved by management. It may be a good idea to have the HR manager review each employee’s time against...
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...Internal Control and Risk Evaluation – Kudler Fine Foods Lisa Cook University of Phoenix ACC/542 August 15, 2011 Internal Control and Risk Evaluation Internal controls and risk assessments are an integral part for a company to be successful. Management at Kudler Fine Foods has reviewed the flowcharts prepared and is requesting information on controls that will be required. Risks are none to be a negative event occurring in a company’s productivity. Internal controls are the policies and procedures put in place to reduce unforeseen occurrences associated with the risks. This brief will discuss the risks of Kudler Fine Food’s current Accounting Information System (AIS) evaluated by Team B and incorporate the controls into the flowcharts, design internal controls to mitigate risks to the systems, evaluate the application of internal controls to the systems, and discuss other controls, outside the system, that Kudler Fine Foods may need. Risks in the Systems According to Hunton, Bryant, & Bagranoff (2004), “business enterprises face a variety of risks, including business, audit, security, and continuity risks” (pg. 48). When analyzing Kudler Fine Foods current information system the team found that Kudler lacked internal controls and risk evaluations required to run their information system. Several concerns were brought up as major potential risks. The three risks focused on are those of business, security, and continuity. Several of Kudler’s risks within the...
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...Title: Internal Control and Other Risk Internal Control and Other Risk University of Phoenix Internal Control and Other Risk Kudler Fine Food is very concern with the company internal control and risk evaluation. The company has put much time and money into ensuring Kudler is well protected. The company has hired an accountant firm to ensure the company has covered all their bases in dealing with risk an internal control. The company is fully concerns with making the most of what technology has to offer them as a company. Management needs an analysis on the risks in the system, which also identify of the risks and internal control points, which should be incorporate through the controls and risks into the flowcharts. The flowchart has been design to include and mitigate the risks associate with internal controls. An evaluation relate to the application concerning the system internal controls will be review and a full discussion of the other controls that may be need which are outside the system. Analyze Risk in the System The first risks in the system that was identified as directly related to software that would provide much more control over Kudler...
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...Internal Control and Risk Evaluation Lauren A Lewis Accounting Information Systems ACC/542 June 23,2014 Yasin Dadabhoy Internal Control and Risk Evaluation Internal controls and risk assessments are an essential part for an organization to be successful. Management at Kudler Fine Foods has reviewed the flowcharts prepared and is requesting information on controls that will be required. Risks are the negative events that may occur causing a change in an organizations productivity. Internal controls are the policies and procedures put in place to reduce unexpected occurrences related with the risks. This brief will discuss the risks of Kudler Fine Food’s current Accounting Information System evaluated by Learning Team A. It will also identify all risk and control points by incorporating the controls and risk into the flowcharts. Team A will design internal controls to ease risks to the systems, and discuss other controls, outside the system, that Kudler Fine Foods may need When evaluating Kudlers accounting information systems and the integration of the automation we found that Kudlers focus should be on payroll, accounts payable, accounts receivable, and inventory processes. Theses processes have risk involved. This brief will focus on Kudlers internal and external controls, which include polices and procedures, HR compliance/code of conduct and computer information access. Kudler must maintain a policy and procedures system documenting in detail how each procedure...
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...Running head: Internal Control and Risk Evaluation Internal Control and Risk Evaluation The purpose of this brief is to identify and analyze possible risks, internal control points, design internal controls, evaluate the application of internal controls and discuss other outside controls, that Kudler Fine Foods may need to upgrade the computer systems. Analysis of Risks of Computer Systems After reviewing the previous flowcharts it is recommended that Kudler Fine Foods automate more of its accounts payable, accounts receivable, inventory, and payroll processes and standardize these processes across all Kudler locations. Therefore, increased computer controls will be needed to ensure the security of data. Computer data could be compromised if proper computer controls are not in place. Risks include theft of confidential and sensitive information stored on computer servers such as company bank account information or personnel records of Kudler clientele and staff. If proper internal controls are not implemented breaches of sensitive data stored in folders that are accessible through the Internet will be exposed through file sharing software with the other Kudler locations. Identify risks and internal control points Identifying risks and internal controls are imperative when information systems are used extensively throughout the fundamental business processes. Information systems general controls are the policies and procedures that apply to all...
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...Running head: INTERNAL CONTROL AND RISK EVALUATION Internal Control and Risk Evaluation Tamika Cummings University of Phoenix ACC/542 Accounting Information Systems January 11, 2010 June Hanson CPA Kathy Kudler, founder envision for the organization was to provide a pleasant shopping experience for customers worldwide. The Kudler Fine Foods visual culture is apparent in the first sentence of the mission statement. “Kudler Fine Foods mission is to provide our customers the finest in selected foodstuffs, wines, and related needs in an unparalleled consumer environment” (University of Phoenix, 2010). Kudler Fine Food stores are 16,000 square feet and are located in bouquet type environment, which is located in upscale areas. In week 2 my team was given the assignment to create flowcharts for Kudler Finer Foods. Four flowcharts were created to show the operating process of four functional areas. This paper will assess some of the internal controls and risk assessment needed for each flowchart. Companies use internal controls within their processes to assist departments in identifying priorities, achieve department goals, report reliably, meet compliance regulations and safeguard. Kudler Fine Food used internal controls to prevent and reduce errors in a cost-effective manner. As business processes become increasingly complex and dynamic, business controls have become an essential tool. Kudler Fine Food have ventured into...
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...Internal Control and Risk Evaluation Kudler Fine Foods requested information on the controls that would be required if the company chose to follow the flowcharts prepared by Team A in Week Two. The following information will analyze the risks, identify the risks and internal control points, design internal controls, evaluate the application of internal controls, and discuss other controls. Risks With Point of Sale Cloud Computing After discussion, Team A chose to recommend a Point of Sale Cloud Computing System to Kudler Fine Foods. By design, the Cloud Computing System allows a company to determine how much capacity is needed and allows them to change the scalability as needed. Kudler Fine Foods would no longer need to be concerned with storage or having the internal resources available to maintain an in-house system. This allows a company with several locations to have access to real-time information, twenty-four hours a day and seven days a week. The Cloud Security Alliance (CSA) has outlined several risks that are associated with Cloud Computing Technology. While there are many benefits to Cloud Computing, it is important to understand the risks involved. According to “CSA Threats” (2010), “customers are also very concerned about the risks of Cloud Computing if not properly secured, and the loss of direct control over systems for which they are nonetheless accountable” (Executive Summary). The first threat mentioned is abuse. Criminals continue to work on breaking...
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...Kudler Fine Foods Risk and Internal Control Evaluation Sonji A. Hart ACC 542 December 8, 2012 Irene Branum Kudler Fine Foods Risk and Internal Control Evaluation According to Hunton et al. (2004), the COSO report states the five objectives to an internal control system are (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring. Upon management’s review of the flowcharts submitted to Kudler Fine Foods from Learning Team B, were requested to provide information on internal controls that are required by the new system. This brief will identify and analyze the risks in the systems, design internal controls and evaluate the application of internal controls to mitigate risks and discuss other outside controls that may be necessary. Identifying Risks and Internal Controls – Flowcharts It is important that businesses be aware that risks can arise internally as well as externally. Risk assessment helps a business to “identify organizational risks, analyze their potential in terms of costs and likelihood of occurrence, and install those controls whose projected benefits outweigh their costs” (Hunton, Bryant, Bagranoff, 2004, pg. 243). Learning Team B created a system customized to meet the needs of Kudler Fine Foods. There are however, potential audit and security risks associated with payroll, accounts payable, accounts receivable, and inventory. A major concern with any business is fraud. According...
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...Kudler Fine Foods: Internal Control and Risk Evaluation Latrice L. Alston ACC 542 Eva King March 3, 2013 Kudler Fine Foods: Internal Control and Risk Evaluation Kathy Kudler founded Kudler Fine Foods in 1998 with a vision to offer customers gourmet products at reasonable prices. As the business has grown, the need to evaluate internal processes and procedures has become increasingly more important. Kudler Fine Foods with three locations in California is faced with increasing productivity while controlling costs internally. In short, Kudler Foods has to manage costs and use technology to aid in the process of streamlining operations in all locations. The purpose of this analysis is to provide a clear and concise analysis of the method Kudler Fine Foods is currently using and offer recommendations to improve efficiency by capturing important data rather than extemporaneous data. Specifically, the current system used by Kudler Fine Foods does little to provide a true picture of inventory sources and the effect of the data on Kudler Fine Foods bottom line. The current data table found on Kudler Fine Foods Finance & Accounting tab simply lists GL codes, products, and cost. While this information provides basic information regarding inventory and costs, the data table does not break out for users of the data comparable data to make decisions regarding inventory. One benefit of the data table currently used is that it provides...
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...the task of preparing a flowchart for possible systems that Kudler Fine Foods could use to enhance their business. After reviewing the flowchart, our client is now requesting that we provide information on controls that will be required for this system. This business brief will analyze the risks in the system, identify all risks and internal control points by displaying them in a flowchart, design internal controls to mitigate risks to the systems, evaluate the application of internal controls to the system, and discuss other controls outside of the system that our client may need. Analyze the risks in the systems that your team analyzed. Every system that is implemented in any company “faces risks [that] come from both external and internal parts of the organization” (Bangranoff, Simkin & Strand, 2008, p. 243). The characteristics of the system that we recommended for Kudler Fine Foods does not exclude these risks. The system has a wide variety of tasks that are needed in order for it to work properly. The main risk that stands out in the outline of this system is to make sure the segregation of duties within the system are properly in place. All of the tasks within the system should be separate and assigned to different employees throughout each store. For example, the same employee that takes inventory cannot be the same employee that processes the invoices in the system for the vendors. This is an internal risk that gives the employee an opportunity to order products from...
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...Kudler’s Audit Processes Kudler Fine Food has expanded business and updated their computer systems to meet demands. As IT information is adopted within the organization, automation control processes has become more virtualized. To ensure that Kudler’s computerize systems function properly an audit must be performed on an annual basis. Management at Kudler Fine Foods wants to see the proposed audit schedules for all systems. Management wants to know the types of audit and how they will be conducted. In addition, management would like to know about events that might prevent reliance on auditing through the computer. Types of Audit Information technology and financial audits primary objectives are to ensure data integrity, safety, secure and operational effectiveness for Kudler’s business processes. Internal audit will provide an opinion on the accuracy and fairness of the financial statements. “This fairness evaluation is conducted in the context of generally accepted accounting principles (GAAP) and requires application of generalized auditing standards” (Bargranoff, 2008). External audits will assess computer-base accounting systems. The purpose of the audit is to determine how the computerized system impacts Kudler’s financial statements. Substantive test will be done to ensure proficiency; and it will begin with a preliminary test. A risk assessment will be another objective of the audit. “Risks of material misstatement can arise from a variety of sources, including external...
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...important part of every company whether performed internally or externally. With the expansion of Kudler Fine Foods and update of their information system, the company must ensure system processes are functioning properly. Conducting an audit will identify any problems with the newly implemented computer system. There are several types of audits that can be performed for each process. The most important factor is choosing the appropriate type of audit that best fits the process. Most audits are conducted similarly and should always be completed in an efficient and effective manner. Furthermore, there are events that could prevent the reliance of an audit through the computer in which management must be made aware of and evaluate accordingly. Types of Audits There are various types of audits that will give credence to the accounting records, accounting policies, and financial statements of a business organization. For example, an internal audit can be conducted of the accounting department to examine company policies and procedures as well as development and evaluations of internal controls. Internal audits will provide management with insight and recommendations based on analysis and assessment of data and business processes. An external audit will assess the computer-based accounting system and provide judgment on the accuracy and fairness of financial statements. “The fairness evaluation is conducted in the context of generally accepted accounting principles (GAAP) and requires...
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... |School of Business | | |ACC/542 Version 2 | | |Accounting Information Systems | Copyright © 2009, 2007 by University of Phoenix. All rights reserved. Course Description In this course, students examine the fundamentals of accounting systems design. Topics include business information systems, business processes and data flows, database concepts and tools, internal control and risks, auditing the information system, and using the information system to perform audit functions. Policies Faculty and students/learners will be held responsible for understanding and adhering to all policies contained within the following two documents: • University policies: You must be logged into the student website to view this document. • Instructor policies: This document is posted in the Course Materials forum. University policies are subject to change. Be sure to read the policies at the beginning of each class. Policies may be slightly different depending on the modality in which you attend class. If you have recently changed modalities, read the policies governing your current class modality. Course Materials ...
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...Kudler Fine Foods Virtual Organization University of Phoenix Acc 542 Recommended Course of Action Kudler Fine Food (KFF) is growing beyond the owner’s initial vision. As a growing company, KFF needed to take advantage of technology to improve business and stay competitive in the organic food industry. KFF, after consulting with us during Week 2, has requested additional information to make sure the recommended system would work as it is intended. Because of this, I have laid out a variety of internal controls to put into place to curb the risks that could be associated with using such a system. The risks will not only be evaluated, but solutions will be given to mitigate the risks associated with the different areas the new software is intended to help. Overall, the recommended course of action for KFF is to put in place multiple internal control elements to ensure the systems not only work efficiently to maximize profits, but work to guard against fraudulent activities. A big focus for this brief is making sure that Sarbanes-Oxley Act of 2002 is followed, specifically section 404, which states management’s responsibility for establishing and maintaining the internal controls and for management to reevaluate the internal control structure at the end of each year. In addition to this, it is recommended that the control environment is enhanced to better give credibility to the new internal controls. With the control environment changing...
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...September 06, 2010 Audit Proposal Our firm has been working with Kudler Fine Foods for several weeks implementing a new accounting information system (AIS) that will assist with the process of payroll, inventory, accounts receivable and payables along with the daily sales. The current AIS that have been implemented will address the systems integrity and the new system will help KFF to ensure that the data is accurate and reliable for the preparation of the financial statements for the organization. Now that the new accounting information system has been set up it is now time to perform an audit of KFF internal controls. In order to do this we will take a look at the different types of audits that maybe used for each process. Then recommend the audit that will most fit the needs of KFF as well as give an explanation of how the audit will be conducted. KFF will also be informed of events that might prevent the reliance on auditing through the computer. An audit for IT involves evaluating the computer’s role for achieving audits and control objectives. These audits look at the components for the AIS for the users, procedures, hardware, software, data communications and the database. According to Bagranoff, Simkin, and Norman (2008) there are four main types of IT audits and they are attestation, findings and recommendations, SAS # 70 and last but not least SAS # 94. The purpose of this audit is for Kudler Fine Foods to gain an understanding of the business functions as...
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