Case study 2
Situation A:
The missing internal controls charctersitics :
In evaluating the internal control over cash payments of Yankee Manufacturing, an auditor learns that the purchasing agent is responsible for purchasing diamonds for use in the company’s manufacturing process, approving the invoices for payment, and signing the checks. No supervisor reviews the purchasing agent’s work.
1, Segregation of duties
2, Employees who purchases diamonds should not be allowed to approve invoices and sign checks. Segregation of duties is needed in order to prevent obvious opportunities for quality control and fraud.
3, Solution: Train a supervisor to approve the purchasing order and another manager or supervisor to approve and sign the checks, this will ensure that proper quality control as well as check & balances are taken into consideration.
Situation B:
The missing internal controls : Rachel Williams owns an architectural firm. Williams’ staff consists of 19 professional architects, and Williams manages the office. Often, Williams’ work requires her to travel to meet with clients. During the past six months, Williams has observed that when she returns from a business trip, the architecture jobs in the office have not progressed satisfactorily. Williams learns that when she is away, two of her senior architects take over office management and neglect their normal duties. One employee could manage the office.
1, Supervision control

2, The problem arises in the lack of an appointed interim supervisor when Rachel is out. The senior managers are taking it upon themselves to manage when she is out, this appears to be causing performance issues at the architectural firm.
3, solution: Rachel should appoint a senior architect as an interim-supervisor when she is out, this supervisor will be in charge of supervising. And when she out then have weekly