(Solution) 13-19. West End Boutiques The West End Boutiques Company Was Founded By Libbie Williams In 1990 With A Single Store In College Station, Texas, And... | Snapessays.com


(Solution) 13-19. West End Boutiques The West End Boutiques company was founded by Libbie Williams in 1990 with a single store in College Station, Texas, and...


Recommend an internal control procedure to prevent the problem in the future.  For the following bullets that pertain to the attached document. Thanks!* Physical inventory counts varied from inventory book amounts by more than 6% at two of the stores. In both cases, physical inventory was lower. * Two of the stores seem to have an unusually high amount of sales returns for cash. * In 9 of the stores, gross profit has dropped significantly from the same time last year.13-19.

 

West End Boutiques

 

The West End Boutiques company was founded by Libbie Williams in 1990 with a

 

single store in College Station, Texas, and the company now has 21 shops located

 

in the triangle of Dallas, San Antonio, and Austin, Texas. Libbie was an accounting

 

major in college, passed the entire CPA exam in her Frst attempt with high scores,

 

and worked for one of the large CPA Frms for 11 years prior to opening her Frst

 

store. Based on her work experience, she fully understands the value of strong

 

internal controls. ±urther, she recently selected a state-of-the art accounting

 

system that connects all of her stores' Fnancial transactions and reports.

 

Libbie employs two internal auditors who monitor internal controls and also search

 

for ways to improve operational e²ectiveness. As part of the monitoring process,

 

the internal auditors take turns conducting periodic reviews of the accounting

 

records. ±or instance, the company takes a physical inventory at all stores once

 

each year and an internal auditor oversees the process. Chris Domain, the most

 

senior internal auditor, just completed a review of the accounting records and

 

discovered several items of concern. These were:

 

?

 

Physical inventory counts varied from inventory book amounts by more

 

than 6% at two of the stores. In both cases, physical inventory was

 

lower.

 

?

 

Two of the stores seem to have an unusually high amount of sales

 

returns for cash.

 

?

 

In 9 of the stores, gross proFt has dropped signiFcantly from the same

 

time last year.

 

Requirements

 

1. Recommend an internal control procedure to prevent the problem in

 

the future.

 


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This question was answered on: May 23, 2022

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