Apollo_Shoes_Case

Apollo Shoes Case Study ACC/492 November 22, 2010 Accounts Receivable Memo Memo To: Samuel Carboy, Controller Re: Accounts Receivables Our firm has used two forms of confirmation for your accounts receivable accounts. We have sent out confirmation letters to your customers that had an account balance as of 12/31/07 for balance verification. We sent requests based on the customers who had a relatively large balance at the year end. We used the positive confirmation method that involves your customer to merely respond whether or not the balance shown on the letter is conclusive with their records. Another type of verification we used is your Accounts Receivable Trial balance report as of 12/31/07 and compared it to the balance on the lead schedule. In the event that the customers who received confirmation letters do not reply, we will use alternative procedures to verify the existence of balances due on your accounts receivables. We will need to verify your receipts of payments from customers in question. By doing so, we will need to review and verify open invoices for customer with open balances and examine any subsequent collections. Bridge working paper Internal controls For Payroll Flowcharts Audit Project NO. ICP-1 |Procedure |*S or W |Audit control procedures / comments | |Hourly employee hours are recorded on a |S |All employees must have a printed time sheet with an automatic | |time card using a time clock machine | |time device that records hours worked. Also allows for employee | | | |review on tardiness. | |Supervisors review and approve time card |S |Supervisors must approve time cards by confirming the hours | |and send time cards to payroll department | |worked by each employee with there approval. | |Personnel department approves all new |S |Segregation of duties applies very well to avoid discrimination | |hires, terminations and hourly rate changes| |between departments. | |Payroll department maintains individual |W |All signed employee forms must be filled with personnel | |employee form for employee deductions | |department including payroll deductions. | |Write it once system for payroll with other|W |The write off system is ok but it does not get reviewed by a | |clerk reviewing | |supervisor to make sure information is entered correctly and | | | |accurately. | |Payroll register and payroll vouchers are |S |This is an appropriate procedure | |sent to treasures office | | | |Treasures reviews checks and signs checks |S |This secures the printing of checks and authority to sign checks.| |after reviewing payroll information. | | | |Copies of checks are filed with appropriate|S |File maintenance is appropriate | |departments | | | |Distribution of checks by supervisors |S |Segregation of duties is vital, regular employees must not | | | |deliver other employee paychecks. This eliminates paycheck theft | | | |and employee confidentiality. | |Supervisor holding checks for employees |W |Payroll department should hold employee checks in a safe or mail | | | |within three days of issue. | *S= Strengths W= Weaknesses Apollo Payroll Audit ( L- 4 ) |Employee |Gross Annual Salary |Gross Annual Salary Paid |Comments | |Number | | | | |1073 |$649,000 |$647,310.74 |Underpaid | |1340 |$450,000 |$449,679.93 |Underpaid | |1280 |$1,500,000 |$1,650,00 |Overpaid | |1310 |$2,500,000 |$2,750,000 |Overpaid | It was noticed that no accrual was made for the last days of the year for payroll. An adjustment must be made to correct this missed entry. It was also noted that an adjusted journal entry must be made for missed taxes for Medicare, Federal and state taxes totaling an mounts of $78,724.08. $18,156.60 for warehouse salaries and $ 60,567.48 for administrative salaries .