what Three options – 2 years ago
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– 2 years ago
[>Accounting homework help](https://www.sweetstudy.com/fields/business-finance-accounting) ## **Overview** This assignment aims to equip you with the necessary skills and strategies to excel in virtual meetings, a crucial aspect of modern business communication. You will analyze the obstacles faced …
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## **Overview**
This assignment aims to equip you with the necessary skills and strategies to excel in virtual meetings, a crucial aspect of modern business communication. You will analyze the obstacles faced in virtual communication, develop techniques for active participation, and present your findings through a professionally written report.
## **Instructions**
### **Research and Analysis**
– Conduct comprehensive research to identify both challenges and advantages associated with virtual meetings.
– Explore factors such as barriers to effective communication, technological issues, levels of engagement, and differences in time zones.
– Explore communication practices to ensure meetings are inclusive and promote equity and diversity.
– Research or use virtual meetings you have attended in the past from various contexts (e.g., team meetings, client presentations, webinars).
– These can be hosted by Strayer University or any other source/location.
– Evaluate each meeting's strengths and weaknesses concerning communication effectiveness, level of participation, and overall impact.
Using the research and analysis you have conducted; you will write a 4–6 page report.
1. Develop a concise introduction highlighting the importance of virtual meetings within contemporary business communication practices.
2. Summarize critical findings regarding challenges faced during virtual meetings and their corresponding benefits based on the research you have conducted.
– Include advice on managing distractions effectively while maintaining high levels of engagement using digital tools.
3. Present detailed observations derived from analyzing the three observed virtual meetings, including assessing their strengths and weaknesses pertaining to effective communication channels utilized throughout these sessions.
4. Develop strategies that encompass best practices that enhance active participation and effective communication during virtual meetings.
– Elaborate upon developed strategies to optimize active participation within virtual meeting settings supported by relevant research material.
5. Summarize how incorporating visually appealing layouts could be applied within real-world scenarios using examples.
6. Incorporate visually appealing layouts and relevant visuals in this report such as charts, graphs, or screenshots that effectively support the presented communication practices.
– Visual aids: This includes drawings, diagrams, charts, graphs, photographs, videos, animations, etc.
– Visual aids should be relevant to the topic and designed to support the main points being communicated.
7. Develop key insights obtained throughout the assignment, emphasizing the significance of effective virtual communication in today's business landscape.
This course requires the use of Strayer Writing Standards (SWS). The library is your home for SWS assistance, including citations and formatting. Please refer to the [Library site](https://library.strayer.edu/sws) for all support. Check with your professor for any additional instructions.
## **Help Resources**
– Check out the [Week 3 Virtual Meeting Assignment Sample](https://canvas.strayer.edu/courses/17740/files/10644766?wrap=1 "cf_COM510_WK3_ Virtual_Meeting_Assignment_Sample.docx") [Download Week 3 Virtual Meeting Assignment Sample](https://canvas.strayer.edu/courses/17740/files/10644766/download?download_frd=1).
– Check out the five virtual meeting examples in the [COM510 Fake MeetingsLinks to an external site.](https://www.kaltura.com/index.php/extwidget/preview/partner_id/956951/uiconf_id/12526281/embed/dynamic?flashvars%5bplaylistAPI.kpl0Id%5d=1_fniznuwg) video.
– Check out this interactive tutorial: [Using Your Own Words: Preventing PlagiarismLinks to an external site.](https://media.capella.edu/CourseMedia/WRK100Element233751/wrapper.asp).
– Check out the [COM510 Business Communications Library Guide](https://library.strayer.edu/COM510).
– Check out this interactive media: [Effective Communication SkillsLinks to an external site.](https://media.capella.edu/CourseMedia/sumid001307/wrapper.asp).
The specific course learning outcome associated with this assignment is:
– Develop business communication skills necessary to lead, manage, influence, and interact with others in a variety of professional settings.
**View Rubric** Week 3 Assignment – Enhancing the Effectiveness of Virtual Meetings **Week 3 Assignment – Enhancing the Effectiveness of Virtual MeetingsCriteriaRatingsPts** Develop a concise introduction highlighting the importance of virtual meetings within contemporary business communication practices. **22.5 to >20.24 ptsExemplary** Developed a concise introduction highlighting the importance of virtual meetings within contemporary business communication practices. **20.24 to >17.99 ptsCompetent** Developed a concise introduction highlighting the importance of virtual meetings within contemporary business communication practices, but the introduction is incomplete and lacks clarity. **17.99 to >15.74 ptsNeeds Improvement** Developed an introduction that covered what virtual meetings are but did not highlight the importance of virtual meetings within contemporary business communication practices. **15.74 to >0 ptsUnacceptable** Did not develop a concise introduction highlighting the importance of virtual meetings within contemporary business communication practices./ 22.5 ptsSummarize critical findings regarding challenges faced during virtual meetings and their corresponding benefits based on the research conducted. **15 to >13.49 ptsExemplary** Summarized critical findings regarding challenges faced during virtual meetings and their corresponding benefits based on the research conducted. **13.49 to >11.99 ptsCompetent** Summarized critical findings regarding challenges faced during virtual meetings and their corresponding benefits based on the research conducted but the summary is incomplete and lacks clarity. **11.99 to >10.49 ptsNeeds Improvement** Summarized findings regarding challenges faced during virtual meetings and their corresponding benefits but the summary was not based on research. **10.49 to >0 ptsUnacceptable** Did not summarize critical findings regarding challenges faced during virtual meetings and their corresponding benefits based on the research conducted./ 15 ptsPresent detailed observations derived from analyzing three observed virtual meetings, including assessing their strengths and weaknesses pertaining to effective communication channels. **22.5 to >20.24 ptsExemplary** Presented detailed observations derived from analyzing three observed virtual meetings, including assessing their strengths and weaknesses pertaining to effective communication channels. **20.24 to >17.99 ptsCompetent** Presented detailed observations derived from analyzing two observed virtual meetings, but the assessment of their strengths and weaknesses pertaining to effective communication channels were incomplete. **17.99 to >15.74 ptsNeeds Improvement** Presented detailed observations derived from analyzing one observed virtual meeting, did not include assessing their strengths and weaknesses pertaining to effective communication channels. **15.74 to >0 ptsUnacceptable** Did not present detailed observations derived from analyzing three observed virtual meetings, including assessing their strengths and weaknesses pertaining to effective communication channels./ 22.5 ptsDevelop strategies that encompass best practices that enhance active participation and effective communication during virtual meetings. **22.5 to >20.24 ptsExemplary** Developed strategies that encompass best practices that enhance active participation and effective communication during virtual meetings. **20.24 to >17.99 ptsCompetent** Developed strategies that encompass best practices that enhance active participation and effective communication during virtual meetings, but the strategies are incomplete. **17.99 to >15.74 ptsNeeds Improvement** Developed strategies but they do not encompass best practices that enhance active participation and effective communication during virtual meetings. **15.74 to >0 ptsUnacceptable** Did not develop strategies that encompass best practices that enhance active participation and effective communication during virtual meetings./ 22.5 ptsSummarize how incorporating visually appealing layouts could be applied within real-world scenarios using examples. **15 to >13.49 ptsExemplary** Summarized how incorporating visually appealing layouts could be applied within real-world scenarios using examples. **13.49 to >11.99 ptsCompetent** Summarized how incorporating visually appealing layouts could be applied within real-world scenarios using examples, but the summary is incomplete. **11.99 to >10.49 ptsNeeds Improvement** Summarized how incorporating visually appealing layouts could be applied within real-world scenarios using examples, but the summary is incorrect. **10.49 to >0 ptsUnacceptable** Did not summarize how incorporating visually appealing layouts could be applied within real-world scenarios using examples./ 15 ptsIncorporate visually appealing layouts and relevant visuals in the report such as charts, graphs, or screenshots that effectively support the presented communication practices. **15 to >13.49 ptsExemplary** Incorporated visually appealing layouts and relevant visuals in the report such as charts, graphs, or screenshots that effectively support the presented communication practices. **13.49 to >11.99 ptsCompetent** Incorporated visually appealing layouts and relevant visuals in the report such as charts, graphs, or screenshots, but the visual layouts do not clearly support the presented communication practices. **11.99 to >10.49 ptsNeeds Improvement** Incorporated visually appealing layouts and relevant visuals in the report such as charts, graphs, or screenshots, but they are not appealing and do not effectively support the presented communication practices. **10.49 to >0 ptsUnacceptable** Did not incorporate visually appealing layouts and relevant visuals in the report such as charts, graphs, or screenshots that effectively support the presented communication practices./ 15 ptsDevelop key insights obtained throughout the assignment, emphasizing the significance of effective virtual communication in today's business landscape. **22.5 to >20.24 ptsExemplary** Developed key insights obtained throughout the assignment, emphasizing the significance of effective virtual communication in today's business landscape. **20.24 to >17.99 ptsCompetent** Developed key insights obtained throughout the assignment, emphasized the significance of effective virtual communication in today's business landscape but the emphasis is incomplete. **17.99 to >15.74 ptsNeeds Improvement** Developed key insights obtained throughout the assignment but the insights are incomplete. Did not emphasize the significance of effective virtual communication in today's business landscape. **15.74 to >0 ptsUnacceptable** Did not develop key insights obtained throughout the assignment. Did not emphasize the significance of effective virtual communication in today's business landscape./ 22.5 ptsWriting is clear, includes appropriate writing mechanics, and follows SWS formatting requirements. **15 to >13.49 ptsExemplary** Writing has very few spelling, punctuation, and grammatical errors; few fragments, comma splices, and run-ons. 0–2 errors present. **13.49 to >11.99 ptsCompetent** Writing has spelling, punctuation, and grammatical errors that are distracting in a few places; few fragments, comma splices, and run-ons. 3–4 errors present. **11.99 to >10.49 ptsNeeds Improvement** Writing has spelling, punctuation, and grammatical errors that are distracting in some places. 5–6 errors present. **10.49 to >0 ptsUnacceptable** Writing has spelling, punctuation, and grammatical errors, fragments, comma splices and run-ons that distract from the message. More than 6 errors present./ 15 ptsTotal Points: 0
– 2 years ago
**Scenario** Wesley Enterprises is a long-term care facility. The organization was recently cited for deficiencies including infectious disease planning and staffing deficiencies. The CEO has decided to hire a consulting firm to evaluate its current processes and make recommendations for improvement…
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Wesley Enterprises is a long-term care facility. The organization was recently cited for deficiencies including infectious disease planning and staffing deficiencies. The CEO has decided to hire a consulting firm to evaluate its current processes and make recommendations for improvement. Upon initial review, the consulting firm has determined that Wesley is utilizing operational processes that are not consistent with current industry practices. The consulting firm has deployed a team of operations management professionals to address the concerns. You are the leader of the team and your first task is to meet with the mid-level managers at Wesley.
#### **Instructions**
Compile a PowerPoint presentation using speaker notes that includes:
– An introduction of the team and a comprehensive description of the roles of each operations team member;
– IDEAS LISTED BELOW
– Who are your team members?
– Hint: Research a facility in your area (Chicago) or a facility with which you have familiarity or interest to address this component. For instance, Wellstar Health System's Operations team comprises of the CEO, CIO, and others.
– What are the responsibilities of those members?
– A discussion of the goals of the team relative to process improvement;
– IDEAS LISTED BELOW
– Improve Patient Safety by reducing the number of medical errors and adverse "never" events. – Action – Implement safety protocols, conduct root cause analyses, and promote a culture open communication regarding patient safety concerns.
– A comparison of operations management in healthcare versus other industries;
– IDEAS LISTED BELOW
– Su[ply Chain Complexity
– Healthcare: The healthcare supply chain includes pharmaceuticals, medical devices and managing the supply chain in healthcare involves dealing with a ride range of suppliers.
– Auto Industry: Auto Industry has a complex supply chain, it is more streamlined compared to healthcare.
– A detailed analysis of the operational issues that are unique to health organizations.
– IDEAS LISTED BELOW
– Ethical and Legal Considerations
– Challenge: Healthcare organization deal with complex ethical dilemmas, including patient confidentiality , end of life decisions, organ transplant
– Impact: Failure to navigate ethical and legal challenges can lead to legal disputes. Compromising the organization reputation, trust with the community and patients.
**MUST HAVE AT LEAST 3 RESOURCES**
– 2 years ago
– 17.01.2025
– 35
Tutor me on this subject – 2 years ago
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– 2 years ago
In-depth study guidance and analytical solution covering Test.
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– 2 years ago **files (2)** – ## DiscussionBoard.docx – CULTPSY3_Ch03_Evolution.pptx **## DiscussionBoard.docx** **Discussion Board** You will be required to participate in the eight discussion prompts posted on the Canvas Discussion Board throughout the course of the semester. These will relate t…
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**files (2)**
– ## DiscussionBoard.docx
– CULTPSY3_Ch03_Evolution.pptx
**## DiscussionBoard.docx**
**Discussion Board**
You will be required to participate in the eight discussion prompts posted on the Canvas Discussion Board throughout the course of the semester. These will relate to assigned course materials. Your responses should incorporate course content assigned during that week and should be approximately 250 words (total, for both prompts).
Please select and reply to two of the prompts below, additionally respond to two of your colleague's comments:
Chapter 3
1. Justify why the cultural practice of eating seal blubber among many indigenous populations in the Arctic is both an evoked culture and a transmitted culture.
2. On Planet Belia, two civilizations (the Edinia and the Elash) have coexisted for centuries in the same environmental context. Both civilizations have marriage rituals (for this question, assume that marriage rituals can only be either monogamous or polygamous). You know that Edinians believe that polygamy is generally better than monogamy, so there are more polygamists than monogamists in Edinia. To determine whether evoked culture or transmitted culture plays a bigger role in affecting marriage rituals, you visit Edinia and Elash and try to find the proportion of marriages that are monogamous versus polygamous. Draw a bar graph of what your data would look like if evoked culture plays a bigger role than transmitted culture.
3. Your professor wants to upload a video of talking horses, and he wants it to go “viral” (i.e., spread very quickly to many people). Based on the different factors that cause ideas to spread, give examples of what the video would need to include for it to have the highest likelihood of spreading.
4. Vancouver has many different neighborhood areas, including Richmond and Strathcona. Richmond is politically more conservative, while Strathcona is politically more liberal. Create an account based on dynamic social impact theory to explain how these different neighborhoods seem to have different forms of political culture.
5. While chatting with your friend, she says that people nowadays have less intelligence than people used to. Evaluate whether this claim is true—be sure to use empirical data to address this issue.
**CULTPSY3_Ch03_Evolution.pptx**
This file is too large to display. [View in new window](https://www.sweetstudy.com/files/cultpsy3-ch03-evolution-pptx-10158105)
**CULTPSY3_Ch03_Evolution.pptx**
This file is too large to display. [View in new window](https://www.sweetstudy.com/files/cultpsy3-ch03-evolution-pptx-10158105)
**## DiscussionBoard.docx**
**Discussion Board**
You will be required to participate in the eight discussion prompts posted on the Canvas Discussion Board throughout the course of the semester. These will relate to assigned course materials. Your responses should incorporate course content assigned during that week and should be approximately 250 words (total, for both prompts).
Please select and reply to two of the prompts below, additionally respond to two of your colleague's comments:
Chapter 3
1. Justify why the cultural practice of eating seal blubber among many indigenous populations in the Arctic is both an evoked culture and a transmitted culture.
2. On Planet Belia, two civilizations (the Edinia and the Elash) have coexisted for centuries in the same environmental context. Both civilizations have marriage rituals (for this question, assume that marriage rituals can only be either monogamous or polygamous). You know that Edinians believe that polygamy is generally better than monogamy, so there are more polygamists than monogamists in Edinia. To determine whether evoked culture or transmitted culture plays a bigger role in affecting marriage rituals, you visit Edinia and Elash and try to find the proportion of marriages that are monogamous versus polygamous. Draw a bar graph of what your data would look like if evoked culture plays a bigger role than transmitted culture.
3. Your professor wants to upload a video of talking horses, and he wants it to go “viral” (i.e., spread very quickly to many people). Based on the different factors that cause ideas to spread, give examples of what the video would need to include for it to have the highest likelihood of spreading.
4. Vancouver has many different neighborhood areas, including Richmond and Strathcona. Richmond is politically more conservative, while Strathcona is politically more liberal. Create an account based on dynamic social impact theory to explain how these different neighborhoods seem to have different forms of political culture.
5. While chatting with your friend, she says that people nowadays have less intelligence than people used to. Evaluate whether this claim is true—be sure to use empirical data to address this issue.
**CULTPSY3_Ch03_Evolution.pptx**
This file is too large to display. [View in new window](https://www.sweetstudy.com/files/cultpsy3-ch03-evolution-pptx-10158105)
**## DiscussionBoard.docx**
**Discussion Board**
You will be required to participate in the eight discussion prompts posted on the Canvas Discussion Board throughout the course of the semester. These will relate to assigned course materials. Your responses should incorporate course content assigned during that week and should be approximately 250 words (total, for both prompts).
Please select and reply to two of the prompts below, additionally respond to two of your colleague's comments:
Chapter 3
1. Justify why the cultural practice of eating seal blubber among many indigenous populations in the Arctic is both an evoked culture and a transmitted culture.
2. On Planet Belia, two civilizations (the Edinia and the Elash) have coexisted for centuries in the same environmental context. Both civilizations have marriage rituals (for this question, assume that marriage rituals can only be either monogamous or polygamous). You know that Edinians believe that polygamy is generally better than monogamy, so there are more polygamists than monogamists in Edinia. To determine whether evoked culture or transmitted culture plays a bigger role in affecting marriage rituals, you visit Edinia and Elash and try to find the proportion of marriages that are monogamous versus polygamous. Draw a bar graph of what your data would look like if evoked culture plays a bigger role than transmitted culture.
3. Your professor wants to upload a video of talking horses, and he wants it to go “viral” (i.e., spread very quickly to many people). Based on the different factors that cause ideas to spread, give examples of what the video would need to include for it to have the highest likelihood of spreading.
4. Vancouver has many different neighborhood areas, including Richmond and Strathcona. Richmond is politically more conservative, while Strathcona is politically more liberal. Create an account based on dynamic social impact theory to explain how these different neighborhoods seem to have different forms of political culture.
5. While chatting with your friend, she says that people nowadays have less intelligence than people used to. Evaluate whether this claim is true—be sure to use empirical data to address this issue.
**CULTPSY3_Ch03_Evolution.pptx**
This file is too large to display. [View in new window](https://www.sweetstudy.com/files/cultpsy3-ch03-evolution-pptx-10158105)
– [\ \ Screenshot2025-01-178.30.48AM.png](https://www.sweetstudy.com/files/screenshot2025-01-178-30-48am-png "Screenshot2025-01-178.30.48AM.png") – 2 years ago
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Order on TutorsGallery →– [\
\
Screenshot2025-01-178.30.48AM.png](https://www.sweetstudy.com/files/screenshot2025-01-178-30-48am-png "Screenshot2025-01-178.30.48AM.png")
– 2 years ago
[>Management homework help](https://www.sweetstudy.com/fields/business-finance-management) [**Read: Yin: Chapter 1, pp 46-61, and pp 226-231**](https://canvas.liberty.edu/courses/768960/modules/items/78148348 "Read: Yin: Chapter 1, pp 46-61, and pp 226-231") [**Read: Keller: Chapters 1 — 2**](https:…
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[**Read: Yin: Chapter 1, pp 46-61, and pp 226-231**](https://canvas.liberty.edu/courses/768960/modules/items/78148348 "Read: Yin: Chapter 1, pp 46-61, and pp 226-231")
[**Read: Keller: Chapters 1 — 2**](https://canvas.liberty.edu/courses/768960/modules/items/78148359 "Read: Keller: Chapters 1 — 2")
[Read: Linking ontology, epistemology, and research methodology.](https://doaj.org/article/5a8cfdc6262f41fa92c56789e71e70bd "Read: Linking ontology, epistemology, and research methodology. ")
https://doaj.org/article/5a8cfdc6262f41fa92c56789e71e70bd
– Read: Synthesizing source ideas for your research paper.
https://www.liberty.edu/casas/academic-success-center/wp-content/uploads/sites/28/Writing-Aid-Synthesizing-Research.pdf
– Watch: Different Types of Case Studies
https://canvas.liberty.edu/courses/768960/pages/watch-different-types-of-case-studies?module_item_id=78148394
– [\
\
OverviewofCaseStudyTypesAssignmentInstructions1.docx](https://www.sweetstudy.com/files/overviewofcasestudytypesassignmentinstructions1-docx "OverviewofCaseStudyTypesAssignmentInstructions1.docx")
– [\
\
OverviewofCaseStudyTypes.docx](https://www.sweetstudy.com/files/overviewofcasestudytypes-docx "OverviewofCaseStudyTypes.docx")
– 2 years ago
[>Accounting homework help](https://www.sweetstudy.com/fields/business-finance-accounting) – 2 years ago **files (2)** – ## W1CaseP.docx – ## CAsww1.pdf **## W1CaseP.docx** DUE Sunday 01/19 Use the Case Study Guidelines under the "Getting Started" tab as a guide on writing this. Your paper should be…
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– 2 years ago
**files (2)**
– ## W1CaseP.docx
– ## CAsww1.pdf
**## W1CaseP.docx**
DUE Sunday 01/19
Use the Case Study Guidelines under the "Getting Started" tab as a guide on writing this. Your paper should be a minimum of 3 pages (not including the cover sheet and references) and follow APA guidelines.
Using current literature, complete "Case 17-10, ABC Retailers-Internal Controls" that is attached. Here are the specific questions that need to be answered:
Required:
1. What are the key considerations when evaluating the severity of a deficiency in a control that directly addresses a risk of material misstatement?
2. Does the Assistant Controller’s failure to adequately review the Vendor Change Form represent a deficiency in the design or operating effectiveness of the control?
3. Is the failure in the vendor request change form control indicative of a material weakness in internal control over financial reporting?
4. Would the deficiency warrant disclosure in the Company’s Form 10-K, Item 9A? If so, what information would the Company be expected to disclose?
5. What implications does the deficiency have on other direct or indirect controls
6. What are the ethical issues that need to be considered? (this question is in addition to the ones at the end of the case)
**## CAsww1.pdf**
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
Case 17-10
ABC Retailers — Internal Controls
ABC Retailers Inc. (ABC or the “Company”) is a U.S. public company that files
quarterly and annual reports with the Securities and Exchange Commission (SEC) with a
fiscal year end of August 31, 20X8. ABC is a leading retail chain operating more than
100 department stores across the continental United States. ABC department stores offer
customers a variety of nationally advertised products, including clothing, shoes, jewelry,
and other accessories. The Company’s supply chain of products is managed through a
single warehouse and distribution facility located in Kansas City, Missouri.
ABC has a centralized accounting and finance structure at its corporate headquarters,
where all processes and controls related to all significant account balances occur. ABC
recognizes revenues from retail sales at the point of sale to its customers. Discounts
provided to customers by the Company at the point of sale, including discounts provided
in connection with loyalty cards, are recognized as a reduction in sales as the products are
sold. Cost of goods sold for the Company primarily consist of inbound freight and costs
relating to purchasing and receiving, inspection, depreciation, warehousing, internal
transfer, and other costs of distribution.
Case Facts
Audit Issue
On June 1, 20X8, the Accounts Payable (AP) Manager received an e-mail inquiry about
the process required for a vendor to change its bank account information. The e-mail was
sent from John Smith at a domain address listed as “Watch-Makers.” Watch Makers is a
manufacturer that supplies ABC-branded watches to ABC’s west region department
stores. In addition, John Smith is the primary contact at Watch Makers with whom the
Company typically interacts.
The AP Manager responded to the e-mail request on June 15, 20X8, with the procedures
required of the vendor, which include completing a vendor bank account request form.
On June 20, 20X8, the AP Manager received a reply e-mail from John Smith at “Watch-
Makers” with a completed vendor bank account request form, which included John
Smith’s signature, new bank account information, and other related information.
Upon receiving the vendor bank account request form, the AP Manager completed a
separately required Vendor Change Form for internal processing. The Vendor Change
Form is completed for new vendors or changes to existing vendors’ information,
including bank account information. The AP Manager sent the completed Vendor Change
Form to ABC’s Assistant Controller, who reviewed and approved the request on June 24,
20X8. The bank account information was updated within the Vendor Master File on June
26, 20X8.
Throughout the month of July 20X8, valid Watch Makers invoices were processed
through the Company’s accounts payable process, and the valid invoices were paid in
accordance with the Company’s process and controls for cash disbursements and wire
Case 17-10: ABC Retailers – Internal Controls Page 2
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
transfers. On August 2, 20X8, the Company received an inquiry from Watch Makers
about the expected timing of the $2 million in outstanding invoices. As a result of the
direct interaction with Watch Makers’ employee John Smith, the Company determined
that the previous vendor bank account change form was received from a fraudulent
domain name with the intent to defraud the Company. The e-mail domain for Watch
Makers is “Watch Makers,” with no hyphen, rather than “Watch-Makers,” with a hyphen.
Both e-mails received from “Watch-Makers” were determined to be from a fraudulent
source (that also fraudulently used John Smith’s name in the e-mail). Because the bank
account information for Watch Makers was changed (as a result of the June 1, 20X8, e-
mail request) approximately $2 million in payments was wired to an incorrect bank
account.
As noted above, there are two employees within the Company that were involved in
processing and approving the Vendor Change Form. The Company’s policy on bank
account change requests was put into effect and communicated by ABC’s Assistant
Controller in a September 1, 20X7 e-mail that indicated that for each Vendor Change
Form requesting a vendor bank account change, the accounts payable department was
required to (1) obtain a previously processed and paid invoice from the vendor requesting
the bank account change, (2) call the vendor using the contact information obtained from
the prior invoice, (3) verify the authenticity of the requested bank account change request
by directly contacting the vendor, and (4) include all relevant information obtained in
steps (1) through (3) as an attachment to the Vendor Change Form. The Company’s
control description relating to the review of a Vendor Change Form by the Assistant
Controller is not explicit regarding the specific attributes of the review. However,
because the policy was distributed by the Assistant Controller and the Assistant
Controller is also the control owner (e.g., performs the review), there is a presumption
that the Assistant Controller would understand that as part of her review, she should
evaluate whether the AP Manager obtained sufficient information to confirm the
authenticity of the bank account change request.
Other Relevant Facts
• Materiality — $8 million.
• The Company processed approximately 105 vendor requested bank account changes
during FY20X8 before the realization that the request from “Watch-Makers” was
fraudulent (from September 1, 20X7, to August 2, 20X8). After the identification of
the misappropriation of assets, the Company’s internal audit department obtained and
reviewed all 105 Vendor Change Forms reviewed by the Assistant Controller, noting
that only five Vendor Change Forms contained the information required by the
policy. In addition, internal audit determined that the primary review procedure
performed by the Assistant Controller related to the verification that the bank account
number was appropriately included on the Vendor Change Form. This procedure was
performed in all cases before the bank account information was input into the
accounts payable system.
• The total wire transfer payments made to the 105 vendors that requested bank account
changes in FY20X8 totaled approximately $56.2 million (based on an analysis
Case 17-10: ABC Retailers – Internal Controls Page 3
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
prepared by Internal Audit of the invoices processed and paid by the Company after
the processing of a Vendor Change Form for the 105 vendors).
• There are more than 30 vendors with annual purchase activity of over $20 million (12
of which have purchase activity of over $40 million); thus, the amount of payments
made to any single vendor in a payables cycle could approximate $2 million,
assuming a cycle of 30 days.
• The Company’s Chief Security Officer completed an internal investigation and
concluded that there was no indication that the AP Manager and Assistant Controller
were involved in the scheme that resulted in the $2 million misappropriation.
• After the determination on August 2, 20X8, that the Vendor Change Form was from a
fraudulent source, the Company ceased processing additional Vendor Change Forms
until it could understand the root cause of the deficiency. On September 1, 20X8, the
Assistant Controller sent a reminder regarding the importance of following the vendor
bank account request change policy. The e-mail also highlighted an enhancement to
the process, which primarily included an enhancement to the Vendor Change Form.
The form was revised to include the following three new, explicit sections that are
required to be completed: (1) contact phone number pulled from previously processed
and paid vendor invoice, (2) name of individual at the vendor (from a previous
invoice) that was contacted, and (3) date discussed/contacted. The policy e-mail
reiterated the requirement to include a copy of the previously processed vendor
invoice with the Vendor Change Form.
• Internal Audit performed a thorough evaluation of the competency of the Assistant
Controller and concluded that notwithstanding the Assistant Controller’s lack of
historical performance, the Assistant Controller was suitably competent to perform
the control.
Engagement Team Note
In planning the FY20X8 audit, the engagement team obtained an understanding of the
internal controls related to cash disbursements. This understanding was developed
through the engagement team’s walkthrough of the cash disbursements process. As part
of its walkthrough procedures, the engagement team made inquiries of appropriate
personnel, inspected relevant documentation, and in certain cases, observed the control
performers carrying out required control procedures. As a result, the engagement team
concluded that there were no significant changes to the cash disbursements process in the
current year.
The engagement team identified three risks of material misstatement relating to the cash
disbursements process. Additionally, the team identified seven control activities within
the cash disbursements process that address the identified risks of material misstatement
in the excerpted worksheet (see Handout 1). As a result of the Audit Issue described
above, the engagement team identified a control deficiency in the following control:
CD5C — The Assistant Controller reviews each Vendor Change Form requesting a bank
account change, including the attached supporting documentation which includes the
following:
Case 17-10: ABC Retailers – Internal Controls Page 4
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
1. A previously processed and paid invoice from the vendor requesting the bank
account change.
2. Details regarding a phone conversation with the vendor using the contact
information from the obtained invoice.
3. Verification of the authenticity of the requested bank account change request.
The Company’s control description regarding the Assistant Controller’s review of the
Vendor Change Form is not prescriptive regarding the specific attributes of the review.
However, based on the Company’s policy on bank account change requests put into
effect and communicated by the Assistant Controller in a September 1, 20X7 e-mail and
the supporting documentation described in the control description, there is a presumption
that the Assistant Controller would understand the primary objective of the control,
which is to evaluate whether sufficient information was obtained by the AP Manager to
confirm that the bank account change request was authentic.
Required:
1. What are the key considerations when evaluating the severity of a deficiency in a
control that directly addresses a risk of material misstatement?
2. Does the Assistant Controller’s failure to adequately review the Vendor Change
Form represent a deficiency in the design or operating effectiveness of the
control?
3. Is the failure in the vendor request change form control indicative of a material
weakness in internal control over financial reporting?
4. Would the deficiency warrant disclosure in the Company’s Form 10-K, Item 9A?
If so, what information would the Company be expected to disclose?
5. What implications does the deficiency have on other direct or indirect controls?
– Case 17-10
– ABC Retailers — Internal Controls
– Required:
**## CAsww1.pdf**
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
Case 17-10
ABC Retailers — Internal Controls
ABC Retailers Inc. (ABC or the “Company”) is a U.S. public company that files
quarterly and annual reports with the Securities and Exchange Commission (SEC) with a
fiscal year end of August 31, 20X8. ABC is a leading retail chain operating more than
100 department stores across the continental United States. ABC department stores offer
customers a variety of nationally advertised products, including clothing, shoes, jewelry,
and other accessories. The Company’s supply chain of products is managed through a
single warehouse and distribution facility located in Kansas City, Missouri.
ABC has a centralized accounting and finance structure at its corporate headquarters,
where all processes and controls related to all significant account balances occur. ABC
recognizes revenues from retail sales at the point of sale to its customers. Discounts
provided to customers by the Company at the point of sale, including discounts provided
in connection with loyalty cards, are recognized as a reduction in sales as the products are
sold. Cost of goods sold for the Company primarily consist of inbound freight and costs
relating to purchasing and receiving, inspection, depreciation, warehousing, internal
transfer, and other costs of distribution.
Case Facts
Audit Issue
On June 1, 20X8, the Accounts Payable (AP) Manager received an e-mail inquiry about
the process required for a vendor to change its bank account information. The e-mail was
sent from John Smith at a domain address listed as “Watch-Makers.” Watch Makers is a
manufacturer that supplies ABC-branded watches to ABC’s west region department
stores. In addition, John Smith is the primary contact at Watch Makers with whom the
Company typically interacts.
The AP Manager responded to the e-mail request on June 15, 20X8, with the procedures
required of the vendor, which include completing a vendor bank account request form.
On June 20, 20X8, the AP Manager received a reply e-mail from John Smith at “Watch-
Makers” with a completed vendor bank account request form, which included John
Smith’s signature, new bank account information, and other related information.
Upon receiving the vendor bank account request form, the AP Manager completed a
separately required Vendor Change Form for internal processing. The Vendor Change
Form is completed for new vendors or changes to existing vendors’ information,
including bank account information. The AP Manager sent the completed Vendor Change
Form to ABC’s Assistant Controller, who reviewed and approved the request on June 24,
20X8. The bank account information was updated within the Vendor Master File on June
26, 20X8.
Throughout the month of July 20X8, valid Watch Makers invoices were processed
through the Company’s accounts payable process, and the valid invoices were paid in
accordance with the Company’s process and controls for cash disbursements and wire
Case 17-10: ABC Retailers – Internal Controls Page 2
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
transfers. On August 2, 20X8, the Company received an inquiry from Watch Makers
about the expected timing of the $2 million in outstanding invoices. As a result of the
direct interaction with Watch Makers’ employee John Smith, the Company determined
that the previous vendor bank account change form was received from a fraudulent
domain name with the intent to defraud the Company. The e-mail domain for Watch
Makers is “Watch Makers,” with no hyphen, rather than “Watch-Makers,” with a hyphen.
Both e-mails received from “Watch-Makers” were determined to be from a fraudulent
source (that also fraudulently used John Smith’s name in the e-mail). Because the bank
account information for Watch Makers was changed (as a result of the June 1, 20X8, e-
mail request) approximately $2 million in payments was wired to an incorrect bank
account.
As noted above, there are two employees within the Company that were involved in
processing and approving the Vendor Change Form. The Company’s policy on bank
account change requests was put into effect and communicated by ABC’s Assistant
Controller in a September 1, 20X7 e-mail that indicated that for each Vendor Change
Form requesting a vendor bank account change, the accounts payable department was
required to (1) obtain a previously processed and paid invoice from the vendor requesting
the bank account change, (2) call the vendor using the contact information obtained from
the prior invoice, (3) verify the authenticity of the requested bank account change request
by directly contacting the vendor, and (4) include all relevant information obtained in
steps (1) through (3) as an attachment to the Vendor Change Form. The Company’s
control description relating to the review of a Vendor Change Form by the Assistant
Controller is not explicit regarding the specific attributes of the review. However,
because the policy was distributed by the Assistant Controller and the Assistant
Controller is also the control owner (e.g., performs the review), there is a presumption
that the Assistant Controller would understand that as part of her review, she should
evaluate whether the AP Manager obtained sufficient information to confirm the
authenticity of the bank account change request.
Other Relevant Facts
• Materiality — $8 million.
• The Company processed approximately 105 vendor requested bank account changes
during FY20X8 before the realization that the request from “Watch-Makers” was
fraudulent (from September 1, 20X7, to August 2, 20X8). After the identification of
the misappropriation of assets, the Company’s internal audit department obtained and
reviewed all 105 Vendor Change Forms reviewed by the Assistant Controller, noting
that only five Vendor Change Forms contained the information required by the
policy. In addition, internal audit determined that the primary review procedure
performed by the Assistant Controller related to the verification that the bank account
number was appropriately included on the Vendor Change Form. This procedure was
performed in all cases before the bank account information was input into the
accounts payable system.
• The total wire transfer payments made to the 105 vendors that requested bank account
changes in FY20X8 totaled approximately $56.2 million (based on an analysis
Case 17-10: ABC Retailers – Internal Controls Page 3
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
prepared by Internal Audit of the invoices processed and paid by the Company after
the processing of a Vendor Change Form for the 105 vendors).
• There are more than 30 vendors with annual purchase activity of over $20 million (12
of which have purchase activity of over $40 million); thus, the amount of payments
made to any single vendor in a payables cycle could approximate $2 million,
assuming a cycle of 30 days.
• The Company’s Chief Security Officer completed an internal investigation and
concluded that there was no indication that the AP Manager and Assistant Controller
were involved in the scheme that resulted in the $2 million misappropriation.
• After the determination on August 2, 20X8, that the Vendor Change Form was from a
fraudulent source, the Company ceased processing additional Vendor Change Forms
until it could understand the root cause of the deficiency. On September 1, 20X8, the
Assistant Controller sent a reminder regarding the importance of following the vendor
bank account request change policy. The e-mail also highlighted an enhancement to
the process, which primarily included an enhancement to the Vendor Change Form.
The form was revised to include the following three new, explicit sections that are
required to be completed: (1) contact phone number pulled from previously processed
and paid vendor invoice, (2) name of individual at the vendor (from a previous
invoice) that was contacted, and (3) date discussed/contacted. The policy e-mail
reiterated the requirement to include a copy of the previously processed vendor
invoice with the Vendor Change Form.
• Internal Audit performed a thorough evaluation of the competency of the Assistant
Controller and concluded that notwithstanding the Assistant Controller’s lack of
historical performance, the Assistant Controller was suitably competent to perform
the control.
Engagement Team Note
In planning the FY20X8 audit, the engagement team obtained an understanding of the
internal controls related to cash disbursements. This understanding was developed
through the engagement team’s walkthrough of the cash disbursements process. As part
of its walkthrough procedures, the engagement team made inquiries of appropriate
personnel, inspected relevant documentation, and in certain cases, observed the control
performers carrying out required control procedures. As a result, the engagement team
concluded that there were no significant changes to the cash disbursements process in the
current year.
The engagement team identified three risks of material misstatement relating to the cash
disbursements process. Additionally, the team identified seven control activities within
the cash disbursements process that address the identified risks of material misstatement
in the excerpted worksheet (see Handout 1). As a result of the Audit Issue described
above, the engagement team identified a control deficiency in the following control:
CD5C — The Assistant Controller reviews each Vendor Change Form requesting a bank
account change, including the attached supporting documentation which includes the
following:
Case 17-10: ABC Retailers – Internal Controls Page 4
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
1. A previously processed and paid invoice from the vendor requesting the bank
account change.
2. Details regarding a phone conversation with the vendor using the contact
information from the obtained invoice.
3. Verification of the authenticity of the requested bank account change request.
The Company’s control description regarding the Assistant Controller’s review of the
Vendor Change Form is not prescriptive regarding the specific attributes of the review.
However, based on the Company’s policy on bank account change requests put into
effect and communicated by the Assistant Controller in a September 1, 20X7 e-mail and
the supporting documentation described in the control description, there is a presumption
that the Assistant Controller would understand the primary objective of the control,
which is to evaluate whether sufficient information was obtained by the AP Manager to
confirm that the bank account change request was authentic.
Required:
1. What are the key considerations when evaluating the severity of a deficiency in a
control that directly addresses a risk of material misstatement?
2. Does the Assistant Controller’s failure to adequately review the Vendor Change
Form represent a deficiency in the design or operating effectiveness of the
control?
3. Is the failure in the vendor request change form control indicative of a material
weakness in internal control over financial reporting?
4. Would the deficiency warrant disclosure in the Company’s Form 10-K, Item 9A?
If so, what information would the Company be expected to disclose?
5. What implications does the deficiency have on other direct or indirect controls?
– Case 17-10
– ABC Retailers — Internal Controls
– Required:
**## W1CaseP.docx**
DUE Sunday 01/19
Use the Case Study Guidelines under the "Getting Started" tab as a guide on writing this. Your paper should be a minimum of 3 pages (not including the cover sheet and references) and follow APA guidelines.
Using current literature, complete "Case 17-10, ABC Retailers-Internal Controls" that is attached. Here are the specific questions that need to be answered:
Required:
1. What are the key considerations when evaluating the severity of a deficiency in a control that directly addresses a risk of material misstatement?
2. Does the Assistant Controller’s failure to adequately review the Vendor Change Form represent a deficiency in the design or operating effectiveness of the control?
3. Is the failure in the vendor request change form control indicative of a material weakness in internal control over financial reporting?
4. Would the deficiency warrant disclosure in the Company’s Form 10-K, Item 9A? If so, what information would the Company be expected to disclose?
5. What implications does the deficiency have on other direct or indirect controls
6. What are the ethical issues that need to be considered? (this question is in addition to the ones at the end of the case)
**## CAsww1.pdf**
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
Case 17-10
ABC Retailers — Internal Controls
ABC Retailers Inc. (ABC or the “Company”) is a U.S. public company that files
quarterly and annual reports with the Securities and Exchange Commission (SEC) with a
fiscal year end of August 31, 20X8. ABC is a leading retail chain operating more than
100 department stores across the continental United States. ABC department stores offer
customers a variety of nationally advertised products, including clothing, shoes, jewelry,
and other accessories. The Company’s supply chain of products is managed through a
single warehouse and distribution facility located in Kansas City, Missouri.
ABC has a centralized accounting and finance structure at its corporate headquarters,
where all processes and controls related to all significant account balances occur. ABC
recognizes revenues from retail sales at the point of sale to its customers. Discounts
provided to customers by the Company at the point of sale, including discounts provided
in connection with loyalty cards, are recognized as a reduction in sales as the products are
sold. Cost of goods sold for the Company primarily consist of inbound freight and costs
relating to purchasing and receiving, inspection, depreciation, warehousing, internal
transfer, and other costs of distribution.
Case Facts
Audit Issue
On June 1, 20X8, the Accounts Payable (AP) Manager received an e-mail inquiry about
the process required for a vendor to change its bank account information. The e-mail was
sent from John Smith at a domain address listed as “Watch-Makers.” Watch Makers is a
manufacturer that supplies ABC-branded watches to ABC’s west region department
stores. In addition, John Smith is the primary contact at Watch Makers with whom the
Company typically interacts.
The AP Manager responded to the e-mail request on June 15, 20X8, with the procedures
required of the vendor, which include completing a vendor bank account request form.
On June 20, 20X8, the AP Manager received a reply e-mail from John Smith at “Watch-
Makers” with a completed vendor bank account request form, which included John
Smith’s signature, new bank account information, and other related information.
Upon receiving the vendor bank account request form, the AP Manager completed a
separately required Vendor Change Form for internal processing. The Vendor Change
Form is completed for new vendors or changes to existing vendors’ information,
including bank account information. The AP Manager sent the completed Vendor Change
Form to ABC’s Assistant Controller, who reviewed and approved the request on June 24,
20X8. The bank account information was updated within the Vendor Master File on June
26, 20X8.
Throughout the month of July 20X8, valid Watch Makers invoices were processed
through the Company’s accounts payable process, and the valid invoices were paid in
accordance with the Company’s process and controls for cash disbursements and wire
Case 17-10: ABC Retailers – Internal Controls Page 2
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
transfers. On August 2, 20X8, the Company received an inquiry from Watch Makers
about the expected timing of the $2 million in outstanding invoices. As a result of the
direct interaction with Watch Makers’ employee John Smith, the Company determined
that the previous vendor bank account change form was received from a fraudulent
domain name with the intent to defraud the Company. The e-mail domain for Watch
Makers is “Watch Makers,” with no hyphen, rather than “Watch-Makers,” with a hyphen.
Both e-mails received from “Watch-Makers” were determined to be from a fraudulent
source (that also fraudulently used John Smith’s name in the e-mail). Because the bank
account information for Watch Makers was changed (as a result of the June 1, 20X8, e-
mail request) approximately $2 million in payments was wired to an incorrect bank
account.
As noted above, there are two employees within the Company that were involved in
processing and approving the Vendor Change Form. The Company’s policy on bank
account change requests was put into effect and communicated by ABC’s Assistant
Controller in a September 1, 20X7 e-mail that indicated that for each Vendor Change
Form requesting a vendor bank account change, the accounts payable department was
required to (1) obtain a previously processed and paid invoice from the vendor requesting
the bank account change, (2) call the vendor using the contact information obtained from
the prior invoice, (3) verify the authenticity of the requested bank account change request
by directly contacting the vendor, and (4) include all relevant information obtained in
steps (1) through (3) as an attachment to the Vendor Change Form. The Company’s
control description relating to the review of a Vendor Change Form by the Assistant
Controller is not explicit regarding the specific attributes of the review. However,
because the policy was distributed by the Assistant Controller and the Assistant
Controller is also the control owner (e.g., performs the review), there is a presumption
that the Assistant Controller would understand that as part of her review, she should
evaluate whether the AP Manager obtained sufficient information to confirm the
authenticity of the bank account change request.
Other Relevant Facts
• Materiality — $8 million.
• The Company processed approximately 105 vendor requested bank account changes
during FY20X8 before the realization that the request from “Watch-Makers” was
fraudulent (from September 1, 20X7, to August 2, 20X8). After the identification of
the misappropriation of assets, the Company’s internal audit department obtained and
reviewed all 105 Vendor Change Forms reviewed by the Assistant Controller, noting
that only five Vendor Change Forms contained the information required by the
policy. In addition, internal audit determined that the primary review procedure
performed by the Assistant Controller related to the verification that the bank account
number was appropriately included on the Vendor Change Form. This procedure was
performed in all cases before the bank account information was input into the
accounts payable system.
• The total wire transfer payments made to the 105 vendors that requested bank account
changes in FY20X8 totaled approximately $56.2 million (based on an analysis
Case 17-10: ABC Retailers – Internal Controls Page 3
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
prepared by Internal Audit of the invoices processed and paid by the Company after
the processing of a Vendor Change Form for the 105 vendors).
• There are more than 30 vendors with annual purchase activity of over $20 million (12
of which have purchase activity of over $40 million); thus, the amount of payments
made to any single vendor in a payables cycle could approximate $2 million,
assuming a cycle of 30 days.
• The Company’s Chief Security Officer completed an internal investigation and
concluded that there was no indication that the AP Manager and Assistant Controller
were involved in the scheme that resulted in the $2 million misappropriation.
• After the determination on August 2, 20X8, that the Vendor Change Form was from a
fraudulent source, the Company ceased processing additional Vendor Change Forms
until it could understand the root cause of the deficiency. On September 1, 20X8, the
Assistant Controller sent a reminder regarding the importance of following the vendor
bank account request change policy. The e-mail also highlighted an enhancement to
the process, which primarily included an enhancement to the Vendor Change Form.
The form was revised to include the following three new, explicit sections that are
required to be completed: (1) contact phone number pulled from previously processed
and paid vendor invoice, (2) name of individual at the vendor (from a previous
invoice) that was contacted, and (3) date discussed/contacted. The policy e-mail
reiterated the requirement to include a copy of the previously processed vendor
invoice with the Vendor Change Form.
• Internal Audit performed a thorough evaluation of the competency of the Assistant
Controller and concluded that notwithstanding the Assistant Controller’s lack of
historical performance, the Assistant Controller was suitably competent to perform
the control.
Engagement Team Note
In planning the FY20X8 audit, the engagement team obtained an understanding of the
internal controls related to cash disbursements. This understanding was developed
through the engagement team’s walkthrough of the cash disbursements process. As part
of its walkthrough procedures, the engagement team made inquiries of appropriate
personnel, inspected relevant documentation, and in certain cases, observed the control
performers carrying out required control procedures. As a result, the engagement team
concluded that there were no significant changes to the cash disbursements process in the
current year.
The engagement team identified three risks of material misstatement relating to the cash
disbursements process. Additionally, the team identified seven control activities within
the cash disbursements process that address the identified risks of material misstatement
in the excerpted worksheet (see Handout 1). As a result of the Audit Issue described
above, the engagement team identified a control deficiency in the following control:
CD5C — The Assistant Controller reviews each Vendor Change Form requesting a bank
account change, including the attached supporting documentation which includes the
following:
Case 17-10: ABC Retailers – Internal Controls Page 4
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
1. A previously processed and paid invoice from the vendor requesting the bank
account change.
2. Details regarding a phone conversation with the vendor using the contact
information from the obtained invoice.
3. Verification of the authenticity of the requested bank account change request.
The Company’s control description regarding the Assistant Controller’s review of the
Vendor Change Form is not prescriptive regarding the specific attributes of the review.
However, based on the Company’s policy on bank account change requests put into
effect and communicated by the Assistant Controller in a September 1, 20X7 e-mail and
the supporting documentation described in the control description, there is a presumption
that the Assistant Controller would understand the primary objective of the control,
which is to evaluate whether sufficient information was obtained by the AP Manager to
confirm that the bank account change request was authentic.
Required:
1. What are the key considerations when evaluating the severity of a deficiency in a
control that directly addresses a risk of material misstatement?
2. Does the Assistant Controller’s failure to adequately review the Vendor Change
Form represent a deficiency in the design or operating effectiveness of the
control?
3. Is the failure in the vendor request change form control indicative of a material
weakness in internal control over financial reporting?
4. Would the deficiency warrant disclosure in the Company’s Form 10-K, Item 9A?
If so, what information would the Company be expected to disclose?
5. What implications does the deficiency have on other direct or indirect controls?
– Case 17-10
– ABC Retailers — Internal Controls
– Required:
**## W1CaseP.docx**
DUE Sunday 01/19
Use the Case Study Guidelines under the "Getting Started" tab as a guide on writing this. Your paper should be a minimum of 3 pages (not including the cover sheet and references) and follow APA guidelines.
Using current literature, complete "Case 17-10, ABC Retailers-Internal Controls" that is attached. Here are the specific questions that need to be answered:
Required:
1. What are the key considerations when evaluating the severity of a deficiency in a control that directly addresses a risk of material misstatement?
2. Does the Assistant Controller’s failure to adequately review the Vendor Change Form represent a deficiency in the design or operating effectiveness of the control?
3. Is the failure in the vendor request change form control indicative of a material weakness in internal control over financial reporting?
4. Would the deficiency warrant disclosure in the Company’s Form 10-K, Item 9A? If so, what information would the Company be expected to disclose?
5. What implications does the deficiency have on other direct or indirect controls
6. What are the ethical issues that need to be considered? (this question is in addition to the ones at the end of the case)
**## CAsww1.pdf**
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
Case 17-10
ABC Retailers — Internal Controls
ABC Retailers Inc. (ABC or the “Company”) is a U.S. public company that files
quarterly and annual reports with the Securities and Exchange Commission (SEC) with a
fiscal year end of August 31, 20X8. ABC is a leading retail chain operating more than
100 department stores across the continental United States. ABC department stores offer
customers a variety of nationally advertised products, including clothing, shoes, jewelry,
and other accessories. The Company’s supply chain of products is managed through a
single warehouse and distribution facility located in Kansas City, Missouri.
ABC has a centralized accounting and finance structure at its corporate headquarters,
where all processes and controls related to all significant account balances occur. ABC
recognizes revenues from retail sales at the point of sale to its customers. Discounts
provided to customers by the Company at the point of sale, including discounts provided
in connection with loyalty cards, are recognized as a reduction in sales as the products are
sold. Cost of goods sold for the Company primarily consist of inbound freight and costs
relating to purchasing and receiving, inspection, depreciation, warehousing, internal
transfer, and other costs of distribution.
Case Facts
Audit Issue
On June 1, 20X8, the Accounts Payable (AP) Manager received an e-mail inquiry about
the process required for a vendor to change its bank account information. The e-mail was
sent from John Smith at a domain address listed as “Watch-Makers.” Watch Makers is a
manufacturer that supplies ABC-branded watches to ABC’s west region department
stores. In addition, John Smith is the primary contact at Watch Makers with whom the
Company typically interacts.
The AP Manager responded to the e-mail request on June 15, 20X8, with the procedures
required of the vendor, which include completing a vendor bank account request form.
On June 20, 20X8, the AP Manager received a reply e-mail from John Smith at “Watch-
Makers” with a completed vendor bank account request form, which included John
Smith’s signature, new bank account information, and other related information.
Upon receiving the vendor bank account request form, the AP Manager completed a
separately required Vendor Change Form for internal processing. The Vendor Change
Form is completed for new vendors or changes to existing vendors’ information,
including bank account information. The AP Manager sent the completed Vendor Change
Form to ABC’s Assistant Controller, who reviewed and approved the request on June 24,
20X8. The bank account information was updated within the Vendor Master File on June
26, 20X8.
Throughout the month of July 20X8, valid Watch Makers invoices were processed
through the Company’s accounts payable process, and the valid invoices were paid in
accordance with the Company’s process and controls for cash disbursements and wire
Case 17-10: ABC Retailers – Internal Controls Page 2
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
transfers. On August 2, 20X8, the Company received an inquiry from Watch Makers
about the expected timing of the $2 million in outstanding invoices. As a result of the
direct interaction with Watch Makers’ employee John Smith, the Company determined
that the previous vendor bank account change form was received from a fraudulent
domain name with the intent to defraud the Company. The e-mail domain for Watch
Makers is “Watch Makers,” with no hyphen, rather than “Watch-Makers,” with a hyphen.
Both e-mails received from “Watch-Makers” were determined to be from a fraudulent
source (that also fraudulently used John Smith’s name in the e-mail). Because the bank
account information for Watch Makers was changed (as a result of the June 1, 20X8, e-
mail request) approximately $2 million in payments was wired to an incorrect bank
account.
As noted above, there are two employees within the Company that were involved in
processing and approving the Vendor Change Form. The Company’s policy on bank
account change requests was put into effect and communicated by ABC’s Assistant
Controller in a September 1, 20X7 e-mail that indicated that for each Vendor Change
Form requesting a vendor bank account change, the accounts payable department was
required to (1) obtain a previously processed and paid invoice from the vendor requesting
the bank account change, (2) call the vendor using the contact information obtained from
the prior invoice, (3) verify the authenticity of the requested bank account change request
by directly contacting the vendor, and (4) include all relevant information obtained in
steps (1) through (3) as an attachment to the Vendor Change Form. The Company’s
control description relating to the review of a Vendor Change Form by the Assistant
Controller is not explicit regarding the specific attributes of the review. However,
because the policy was distributed by the Assistant Controller and the Assistant
Controller is also the control owner (e.g., performs the review), there is a presumption
that the Assistant Controller would understand that as part of her review, she should
evaluate whether the AP Manager obtained sufficient information to confirm the
authenticity of the bank account change request.
Other Relevant Facts
• Materiality — $8 million.
• The Company processed approximately 105 vendor requested bank account changes
during FY20X8 before the realization that the request from “Watch-Makers” was
fraudulent (from September 1, 20X7, to August 2, 20X8). After the identification of
the misappropriation of assets, the Company’s internal audit department obtained and
reviewed all 105 Vendor Change Forms reviewed by the Assistant Controller, noting
that only five Vendor Change Forms contained the information required by the
policy. In addition, internal audit determined that the primary review procedure
performed by the Assistant Controller related to the verification that the bank account
number was appropriately included on the Vendor Change Form. This procedure was
performed in all cases before the bank account information was input into the
accounts payable system.
• The total wire transfer payments made to the 105 vendors that requested bank account
changes in FY20X8 totaled approximately $56.2 million (based on an analysis
Case 17-10: ABC Retailers – Internal Controls Page 3
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
prepared by Internal Audit of the invoices processed and paid by the Company after
the processing of a Vendor Change Form for the 105 vendors).
• There are more than 30 vendors with annual purchase activity of over $20 million (12
of which have purchase activity of over $40 million); thus, the amount of payments
made to any single vendor in a payables cycle could approximate $2 million,
assuming a cycle of 30 days.
• The Company’s Chief Security Officer completed an internal investigation and
concluded that there was no indication that the AP Manager and Assistant Controller
were involved in the scheme that resulted in the $2 million misappropriation.
• After the determination on August 2, 20X8, that the Vendor Change Form was from a
fraudulent source, the Company ceased processing additional Vendor Change Forms
until it could understand the root cause of the deficiency. On September 1, 20X8, the
Assistant Controller sent a reminder regarding the importance of following the vendor
bank account request change policy. The e-mail also highlighted an enhancement to
the process, which primarily included an enhancement to the Vendor Change Form.
The form was revised to include the following three new, explicit sections that are
required to be completed: (1) contact phone number pulled from previously processed
and paid vendor invoice, (2) name of individual at the vendor (from a previous
invoice) that was contacted, and (3) date discussed/contacted. The policy e-mail
reiterated the requirement to include a copy of the previously processed vendor
invoice with the Vendor Change Form.
• Internal Audit performed a thorough evaluation of the competency of the Assistant
Controller and concluded that notwithstanding the Assistant Controller’s lack of
historical performance, the Assistant Controller was suitably competent to perform
the control.
Engagement Team Note
In planning the FY20X8 audit, the engagement team obtained an understanding of the
internal controls related to cash disbursements. This understanding was developed
through the engagement team’s walkthrough of the cash disbursements process. As part
of its walkthrough procedures, the engagement team made inquiries of appropriate
personnel, inspected relevant documentation, and in certain cases, observed the control
performers carrying out required control procedures. As a result, the engagement team
concluded that there were no significant changes to the cash disbursements process in the
current year.
The engagement team identified three risks of material misstatement relating to the cash
disbursements process. Additionally, the team identified seven control activities within
the cash disbursements process that address the identified risks of material misstatement
in the excerpted worksheet (see Handout 1). As a result of the Audit Issue described
above, the engagement team identified a control deficiency in the following control:
CD5C — The Assistant Controller reviews each Vendor Change Form requesting a bank
account change, including the attached supporting documentation which includes the
following:
Case 17-10: ABC Retailers – Internal Controls Page 4
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
1. A previously processed and paid invoice from the vendor requesting the bank
account change.
2. Details regarding a phone conversation with the vendor using the contact
information from the obtained invoice.
3. Verification of the authenticity of the requested bank account change request.
The Company’s control description regarding the Assistant Controller’s review of the
Vendor Change Form is not prescriptive regarding the specific attributes of the review.
However, based on the Company’s policy on bank account change requests put into
effect and communicated by the Assistant Controller in a September 1, 20X7 e-mail and
the supporting documentation described in the control description, there is a presumption
that the Assistant Controller would understand the primary objective of the control,
which is to evaluate whether sufficient information was obtained by the AP Manager to
confirm that the bank account change request was authentic.
Required:
1. What are the key considerations when evaluating the severity of a deficiency in a
control that directly addresses a risk of material misstatement?
2. Does the Assistant Controller’s failure to adequately review the Vendor Change
Form represent a deficiency in the design or operating effectiveness of the
control?
3. Is the failure in the vendor request change form control indicative of a material
weakness in internal control over financial reporting?
4. Would the deficiency warrant disclosure in the Company’s Form 10-K, Item 9A?
If so, what information would the Company be expected to disclose?
5. What implications does the deficiency have on other direct or indirect controls?
– Case 17-10
– ABC Retailers — Internal Controls
– Required:
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