IT Internal Control Report
November 5, 2012
Elizabeth S. Thornton
November 5, 2012
To: Senior Management
From: Joe D. Gish, Controller
RE: Internal Controls
Dear Senior Management:
Our internal controls here at Apollo, I believe need to be ascertained once more. Internal controls are vital to our organizations success, as we progress to an elite distributor of shoes in a globalized market. If our internal controls are deficient, then we will have severe problems and adjustments to be done at audit time, which will be detrimental to the whole company. The auditors will test us vigorously to see the state of our organization.
The biggest area of concern I see is in our revenue cycle. I wish to do a full investigation on how our invoices go, and to ensure the monies billed are being collected on a timely fashion. This directly affects our: bottom line, cash collections, and balance sheet. I need to coordinate with Ms. Ramirez in Internal Audit to quickly devise a plan to test these controls. In addition, I feel a need to trace the invoices, receipts to see how they exactly fit in on the financials.
If the internal controls are lacking in this area, our: sales, cash, and accounts receivable figures could be grossly over/understated. If this is the case, the upcoming audit will prove to be disheartening to us and our shareholders. If material misstatements are found in our financials our stock price will also plummet. Our report must be accurate, because this is going to be filed with the Securities Exchange Commission (SEC). Because a managerial report on internal controls is mandated by Rule 404 of Sarbanes Oxley, ergo we have to be certain our controls are up to par.
I will work with Ms. Ramirez to identify the problems in the revenue cycle by checking approval on the invoicing side. We need to ensure all invoices are properly approved by the immediate supervisor and each invoice is checked by the compliance...