provide recommendations on what controls the
business owner should put in place to prevent loss of inventory and
ensure that any losses are reported immediately. Also, specify which
parts of the financial statements are affected by these losses. MAIN
DETAIL Internal controls are methods and strategies used to keep
information and inventory safe from theft and to easily tell if
something is compromised or missing. In this assignment, you will
recommend internal controls for safeguarding inventory from an
accounting perspective and explain which financial statements are
affected by missing inventory. Scenario One of your friends has opened
a new wholesale electronics business and wants your help figuring out
some inventory issues they are facing. One night last week, there
seemed to be fewer HD televisions in the warehouse than they expected.
The last time they were in the warehouse was a week earlier, and they
hadn’t noticed anything amiss. As they looked around, they saw that
the evening warehouse worker was filling the last orders of the day.
The delivery driver and day warehouse worker were gone for the day,
and the delivery van keys were on the desk that the warehouse workers
shared. The doors to the loading dock were open, as was the door to
the office area where the accountant, two customer service
specialists, and the owner worked. Knowing that you are familiar with
accounting principles, they asked for your help in figuring out how to
prevent this in the future. Prompt Based on what you have learned
about internal controls, provide recommendations on what controls the
business owner should put in place to prevent loss of inventory and
ensure that any losses are reported immediately. Also, specify which
parts of the financial statements are affected by these losses.
Specifically, you must address the following rubric criteria: Role of
Internal Controls Explain the role of internal controls in business
settings. Also explain how not having internal controls in place may
impact the accurate analysis of any wrongdoing. Recommendations
Recommend at least two internal controls that should be put in place
to prevent inventory from going “missing,” noting any assumptions you
are making about the root cause of the missing products and how your
recommendations will help address them. Recommend at least one control
that should be put in place to alert the owner if something is
actually missing. Financial Statements If you found that two $400 HD
televisions were missing, explain which financial statements you would
correct and how. Be specific as to accounts and amounts. Guidelines
for Submission Submit a Word document with 12-point Times New Roman
font, double spacing, and one-inch margins.