Simply Steam
Andrea Cyr
Module 8 Case – Simply Steam Integrity and Ethical Values 5 The owners are very invested in the business and have a hand in the day to day operations. However, there is high employee turnover which does not create a loyalty in the company culture. Also sales people have the ability to negotiate pricing which can be taken advantage of since they are paid on commission.
Commitment to Competence 5
Employees, especially in the accounting department, may not be qualified since they do not have college degrees and have little experience. However the training new employees receive shows the company is committed to having competent employees for the job.
Board of Directors or Audit Committee Participation 5
The board members are the managers, so there is no independence in decision making. However they are very knowledgeable about the industry and are aware of the day to day issues of the business.
Management’s Philosophy and Operating Style 6
The owners create a good company culture by having an open door policy. Even though they do not have a large understanding of accounting issues, the fact they want a CPA to audit their financial statement shows they want to produce accurate financial statements and monitor their internal controls and business risk. However, there is no budgeting process or internal controls to reduce the risk of fraud. “Tone at the top” can be improved. Simply Steam’s internal controls can be overridden by management and this could open the door to fraud.
Organizational Structure 6
The accounting department should have a manager who oversees this function, especially since the staff does not have a lot of experience and there is a high turnover rate. The owners are very involved in the business which is a good sign and they also determine operating policies and procedures.
Assignment of Authority and Responsibility 4
The office manager approves all sales orders which is a useful control in
Module 8 Case – Simply Steam Integrity and Ethical Values 5 The owners are very invested in the business and have a hand in the day to day operations. However, there is high employee turnover which does not create a loyalty in the company culture. Also sales people have the ability to negotiate pricing which can be taken advantage of since they are paid on commission.
Commitment to Competence 5
Employees, especially in the accounting department, may not be qualified since they do not have college degrees and have little experience. However the training new employees receive shows the company is committed to having competent employees for the job.
Board of Directors or Audit Committee Participation 5
The board members are the managers, so there is no independence in decision making. However they are very knowledgeable about the industry and are aware of the day to day issues of the business.
Management’s Philosophy and Operating Style 6
The owners create a good company culture by having an open door policy. Even though they do not have a large understanding of accounting issues, the fact they want a CPA to audit their financial statement shows they want to produce accurate financial statements and monitor their internal controls and business risk. However, there is no budgeting process or internal controls to reduce the risk of fraud. “Tone at the top” can be improved. Simply Steam’s internal controls can be overridden by management and this could open the door to fraud.
Organizational Structure 6
The accounting department should have a manager who oversees this function, especially since the staff does not have a lot of experience and there is a high turnover rate. The owners are very involved in the business which is a good sign and they also determine operating policies and procedures.
Assignment of Authority and Responsibility 4
The office manager approves all sales orders which is a useful control in