Business Case

20 August 2012

Good Morning, Mr. Mays. My name is Tyrone S. Gibbs. I am an auditor for the CPA firm of Croix, .Marais, and Kale. While doing an audit on your company I found several problems with the internal controls that your company has in place. The system for collecting checks is doomed for failure. Because you don’t have anyone designated to make a list of the checks that are received anyone could take these checks and deposit then. I recommend that you appoint someone to this task. By using the cashier or the accounts receivable person who handles the cash it is easy for them to manipulate the system for them to steal the checks that are coming in. Also the mail receipts that are deposited weekly should be deposited daily. The process in which they are received needs to be revamped. Two mail clerks instead of one should be present when the checks are opened. The checks should be stamped with ”For Deposit Only” with a company stamp. By using this restrictive endorsement it will make it harder for someone to divert the checks for personal use. The mail clerks should prepare a list of the checks that come in with the name of the issuer, purpose of payment and check amount. Each clerk should sign the check list. The original list along with checks and remittance advices need to be sent to the cashier department. Then the cashier adds the checks to the over counter receipts and prepares the daily cash summary. Then the clerks need to send another copy of the list prepared to the treasurer’s office for comparison. By doing this it is ensured that all mail receipts have been include. By using these recommendations you will be assured of having control of your deposits. Thank you for your time.

Sincerely

Tyrone S Gibbs