...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 system were noted...
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...System Brief Tina Monteverdi Accounting Information Systems ACC/542 July 15, 2013 Milan Havel Computer Information System Brief Kudler Fine Foods prides their selves on providing an upscale environment with all of the very best domestic and imported foods and wines. They have an experienced and knowledgeable staff that is able to assist customers. The founder, Kathy Kudler developed a business plan and obtained a financing and was able to open a store all within a six month time a turn that business into a profitable business in the first year. Over the next five years 2 more stores were opened and continuing to thrive. In order to continue growing Kudler’s is evaluating their accounting information system needs and determine if there are changes that can be made to improve their systems with either system changes or technology upgrades, as well as identify an potential technology threats that may need to be addressed. Identify Kudler’s Key business and Accounting Information Needs Kathy Kudler and her management team understand the benefits of a system that would meet the needs of this business and help to continue to thrive. Kudler’s computer system will be used to integrate their point of sale (POS) systems along with their asset management and accounting, accounts payable modules, general ledger, bank reconciliations, and lastly one of the most important systems the security systems. “The initial business plan for Kudler’s included funds in excess of $50...
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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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...Kudler Fine Foods is a company that uses a significant amount of electronic data and information to flow through their system on a daily basis. The company relies on this data to be accurate and trustworthy. Considering the dependency and importance of the electronic data flowing through the system in such a high volume, they would benefit from computer assisted audit techniques (CAATs). A CAATs audit is focused on testing the computer systems for data integrity and security of the company’s information data processing. CAATs provide a 10 step process made available to the auditor for use as guidelines in conducting an efficient audit. The guidelines will reduce the time to complete the audit, save money and ensure a high degree of confidence in the audit results. The CAATs audit will provide the owner of Kudler Fine Foods with assurance that the systems are operating with accuracy and the data is secure. To initiate the audit procedure, the auditor will first collaborate with the owner of Kudler Fine Foods to define the intents and desired end results of the audit. The auditor will review the computer systems, processes, types of data and process controls with Kathy Kudler to ensure that she thoroughly understands the system. Through this collaboration, the auditor will determine the best strategies for assessing the risks associated with the system and current processes. He or she will also determine the optimal strategy for collecting and testing data. Once...
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...2012 Christy Countryman Kudler Fine Food is the fast growing fine food specialty business that was established in 1998, and at each of their stores the company first initially selected Microsoft Access as their AIS to track employees, customer, inventory, orders, and sales. Kudler’s products have perishable inventory that must be properly tracked. This brief will evaluate database tables from an accounting perspective. In addition, gives recommendations for improvement, pivot table, and entity relationship diagram will help the company have a better decision-making process. Assessment of the design elements of the data tables from an accounting perspective. Data Table analysis is vital to the success of the business, the data given in these tables is available for the end user to determine how much inventory is available and when it require to order more inventory. The purpose of the data tables will arranges the financial data into department, financial codes, items, and sums of total amount of transaction. Data table get the most out of the informational and visual presentation for the financial data. The user of the data can easily to identify the item belongs to certain department and how many items were received at the given cost for a certain period. In addition, the data allows in finding quantity and total amount on hand for an item and calculating average price of the item. Kudler Fine Foods data tables the company has now, organized per...
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...Kudler Fine Foods Financials Kudler Fine Foods Financials Kudler Fine Foods is a local San Diego retailer of specialty food items with three upscale stores in La Jolla, Del Mar, and Encinitas. They provide the finest domestic and imported food items at reasonable prices. The store’s founder, Kathy Kudler, built the enterprise based on her vision of selecting and purchasing only the finest of products, offering customers a delightful and pleasing shopping experience, and becoming a purveyor of choice for customers seeking to purchase the best epicurean. The members of Team C learning team analyzed the financial statements of Kudler Fine Foods by making comparisons at the intra-company level, industry averages, and with other competing companies (inter-company basis). Team C used horizontal analysis, vertical analysis, and ratio analysis to assess the significance of Kudler’s financial data. Team C presents the numerical data below, followed by the analysis of the financial statements. Financial Ratios Kudler Industry Average Safeway Current Ratio 16.94:1 1.96:1 0.83:1 Quick Ratio 13.04:1 0.73:1 0.27:1 Receivable Turnover 125.5X Not avail 72X Average Collection Period 3 days Not avail 5 days Inventory Turnover 19.8X 9.65X 12.5X Days in Inventory 18.43 days 38.82 days 29.20 days Asset Turnover 4.03X 4.0X 2.89X Profit Margin 6.2% 5.2% 1.18% Return on Assets 25.3% 3.1% 5.8% Return on Common SE 90% 9.0% 11.91% Debt...
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...Executive Summary Kudler Fine Foods was first established in 1998 with an objective strongly focused on providing its clients the opportunity to buy fresh ingredients used to make delicious cuisines. Since then, Kathy Kudler (founder) has opened two more locations to satisfy her target market’s thirst for her product(s). Although this small business expansion has increased the customer base and or revenue pursued by its owner, the induction of additional services provided has also slightly altered the projected operations plan and or business plan. Kudler Fine Food’s mission states that it will “provide its customers with the finest selected foodstuffs, wines, and related needs in an unparalleled consumer environment“(Apollo Group, 2008). In order for Kudler to meet the needs of the consumer at all times, administration has proposed a review of the companies operations and or communication plan(s) be reviewed for contingency of any unforeseen threats to daily operations. Scope To assist the company in their daily functions, Kudler Fine Foods stores information used to determine market conditions, customer demographics, individual store sales, employee demographics, payroll, administrative functions, and other human resource related information. A post review of Kudler’s fixed operations reveals the company is currently unprepared for any and all potential threats that may halt daily operations for an over-extended period. Potential threats that Kudler may face are: breach and...
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...Preface Kudler Fine Foods (Kudler) is an upscale specialty food store. They have had remarkable success since their first store opened in 1998, opening a second store in 2000 and a third in 2003. Kudler’s success is dependent on their business model as well as an effective accounting information system (AIS). The current system is strong but could be enhanced to build productivity and profitability. Over the course of the last five weeks the following recommendations have been made to Kudler’s management team to make improvements to their existing system. Implementation of industry-specific software to improve the current AR, AP, inventory and payroll processes as well as developing new processes for sales and general ledger functions. The value-added and automation of the processes improves accuracy, eliminates double entry and allows for communication between locations. Refine the existing database with the use of flowcharts and ER diagrams to understand the flow of data and move away from broad spreadsheet reports and instead use pivot tables which will provide a summary of data useful for decision-making. Maintain, review, update, and test, policies and procedures, by means of developing good internal controls and auditing them regularly. The following brief will indicate how Kudler will also benefit from audit software and computer assisted auditing techniques (CAATs) to validate their system’s data integrity. Introduction Kudler Fine Foods (Kudler) recently...
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...System Integrity and Validation - Kudler Fine Foods Theresa Gibbs Acc/542 October 29, 2012 Yasin Dadabhoy System Integrity and Validation - Kudler Fine Foods Over the past few weeks the team has analyzed Kudler’s information systems, recommended industry-specific software, analyzed its inventory data tables, and internal controls and risks for an audit proposal. After analyzing the necessary components the team recommends that an SAS 94 audit is appropriate for Kudler. To conduct the audit the auditor will use computer assisted audit tools and techniques (CAATTs) or in Kudler’s case computer assisted audit techniques (CAATs). The following brief is an explanation of how CAATs is used to validate data and the system integrity, and explain audit productivity software. CAATs CAAT is techniques that increase the auditor’s productivity and effectiveness during the audit function. CAATTs uses tools, such as software to increase the auditor’s productivity and extract data, and analyze the data in addition to the techniques. The techniques are used to validate application integrity and verify data integrity of Kudler’s information systems. “These techniques include generating test decks of data, writing and embedding automated audit modules, and performing digital analysis and linear regression on a client’s data” (Hunton, 2004, p. 179). CAAT assists the auditor in collecting sufficient, reliable, relevant, and useful evidence that supports the planned audit objects. The...
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...Over the past several weeks I have had the opportunity to study Kudler Fine Foods operations. This has included their financials, inventory, payroll, and human resources. The attached brief explores audit productivity software used by Kudler’s audit firm and how it can help Kudler improve its operation and plans for expansion. Computer Assisted Auditing Techniques Computer Assisted Audit Techniques (CAATs) are computer base tools that an auditor uses to carry out various automated tests to evaluate the IT system or data. CATTs are very useful when the company has a significant volume of audit data in an electronic format (IT Audit Manual, 2011). Kudler Fine Foods has an independent auditor review their books every year. Among the computer assisted auditing techniques the auditors could use to validate data and system integrity in Kudler’s system are: • Electronic working papers – are used to support the audit opinion by demonstrating that the auditor has complied with set standards across all jobs, and the documents contain relevant information material to the audit (Quizlet, 2011). An advantage to using electronic work papers is that they automatically adjust other working papers when a related working paper is changed. They automate the audit process increasing the auditor’s efficiency. When the audit is complete, the auditor can automatically produce Generally Accepted Accounting Principles (GAAP) financial statements (Core Concepts of Information Technology Auditing...
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...Kudler Fine Foods Misty Robinson MMPBL/502-Managing the Business Enterprise Abstract Kudler Fine Foods is an upscale food store in the San Diego metropolitan area, specializing in fine foods and wines. This paper will explore the primary functions of management and who is responsible for each function. Also, how Kudler Fine Foods is utilizing the use of technology and the internet within the organization. Table of Contents Introduction…………………………………………………………………………………….. 4 Primary Functions of Management at Kudler Fine Foods……………………………………... 4 The Use of Technology and the Internet……………………………………………………….. 5 Five Forces – Porter’s Model……………………………………………………………………6 Conclusion……………………………………………………………………………………….7 References……………………………………………………………………………………….8 Kudler Fine Foods Introduction Kathy Kudler, founder of Kudler Fine Foods, has a passion for gourmet cooking, which requires the use of gourmet ingredients. She was often tasked in finding the ingredients she needed to prepare the gourmet meals she desired. While out shopping one day she realized there was a great demand for a fine food store, one that could offer the finest ingredients and other specialty items at a reasonable price. Kathy had a vision; it was then that the first Kudler Fine Foods was opened in 1998. The store is driven by its mission statement – “our selections, coupled with our experienced, helpful and knowledgeable staff, merge to offer each customer a delightful and pleasing shopping...
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...Kudler Fine Foods is a client of the accounting firm where you work. Kudler’s management is interested in effectively integrating technology into its business operations. They have asked you to prepare a brief detailing how computer systems might be more effectively integrated to meet their business needs and improve their accounting operations. Identify Kudler’s key business and accounting information needs. Analyze the strengths and weaknesses of Kudler’s current computer system and technology use, including hardware and software. Explain what opportunities Kudler has in terms of technology and provide suggestions for improving Kudler’s ability to maximize these opportunities. Evaluate the threats that Kudler may encounter given their current systems and offer your suggestions, in terms of using technology. Use APA formatting where appropriate for references, citations, and title page. Operations Support Systems- ch1 The role of a business firm's operations support systems is to efficiently process business transactions, control industrial processes, support enterprise communications and collaboration, and update corporate databases Transaction processing systems are an important example of operations support systems that record and process data resulting from business transactions. They process transactions in two basic ways. Management information systems (MIS) provide information in the form of reports and displays to managers and many business professionals. The...
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...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 application of generalized auditing...
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...After reviewing Kudler's Fine Foods it was determined that several processes could be improved by implementing accounting information system (AIS). The processes that will be targeted are accounts receivable, payroll, inventory, and accounts payable. The accounting firm recommended the use of AIS. The type of software recommended would be industry specific software that can be purchased of the rack. This was decided because of the reduction in cost to acquire the program compared to a customized system. Also the training on and maintenance of the program will be included in the purchase price. The next step would be to determine what type of audit that would best fit the processes that are targeted. There are four types of audits. There is the attestation audit, which according to "KHSA Karren, Hendrix, Stagg, Allen" (2012), "are assurance engagements that require procedures to be applied to financial reporting processes and controls, but do not necessarily require an audit. Then there are findings and recommendations that are used when implementing a system. The next type of audit is the SAS 70 audit. According to "NBD Accountants Consultants" (2008), “It is an auditing standard put forth by the AICPA that is utilized by auditors for examining internal controls in service organizations. Service organizations are the host of companies that provide critical, third-party outsourcing services to other companies.” The final type of audit is the Statement on Auditing Standards (SAS)...
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...A. Davis, Jr. ACC/542 October 21, 2013 Irene Branum Preface In the last few weeks the accounting firm, Team D has looked into characteristics of Kudler Fine Foods and provided recommendations to update and replace existing components of the IT system. These recommendations made can yield in the company’s increased productivity, profitability, and remove potential threats. Team D determined that industry specific software is useful in comparison to customized software. Four main modules such as payroll, account payable, accounts receivable, and inventory were developed as well as enhancement of each flowchart based on the appropriate system. Team D examined the database completeness at Kudler’s intranet and developed a pivot table; therefore, making the decision-making process easy. External and internal risks were analyzed and internal control points were developed by incorporating both risks and controls into a flowchart. Team D also showed why findings and recommendations are more useful to the company in comparison to SAS70 and SAS94 audits. The team identified events that will lessen the dependence on auditing through computer and showed a brief description how the audit should be conducted. System Integrity and Validation Kudler Finer Foods has looked for recommendations regarding the company, to include computer information system, automated process of an accounting information system, data table analysis, internal control and risk evaluation, and auditing procedures...
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