Rosaliz has been working for ten years in a food and institutional product distribution company that provides services in Puerto Rico and the Caribbean. The company supplies groceries, frozen foods, dairy products, beverages, paper, disposable products and public hygiene items to hotels, restaurants, fast food establishments and public and private institutions. After many years of effort and long hours of work, two years ago she was appointed Sales Manager and, since then, she has been in charge of 15 vendors around the island. Rosaliz holds meetings with the Sales group every Monday at 8:00 a.m. m. In these meetings, the priorities of the week are discussed in terms of sales, delivery routes of purchase orders and particularities that affect customers. She is very dexterous and has shown the ability to deal with all the situations that come her way on a daily basis. After finishing today's meeting, Alan, her supervisor, calls her into the office to discuss various issues related to the term that just ended. Alberto, the warehouse supervisor, is also in the office. Alan shares his concern about declining revenue, particularly from customers who buy groceries and frozen foods from him. The data is presented below: Year Groceries Frozen Dairy Drinks Paper Disposable Hygiene 1Qtr. 20 * 2 $8,500 $3,800 $2,400 $1,700 $2,800 $1,350 $1,600 1Qtr. 20 x 3 $6,000 $2,900 $2,300 $1,850 $2,800 $1,500 $1,800 Difference -$2,500 -$900 -$100 +$150 $-.-- +$150 +$200 However, it indicates that it had already reported to the IT department certain inconsistencies between the data entered in the purchasing module of the ERP system that caused errors in the orders. However, he is not aware of what has happened with this problem. Alberto indicates that if he receives an order wrong through the system, the shipment of the merchandise will go wrong too, but he cannot stop the shipment of the merchandise. In addition to this, Alan has been receiving information on stock outs and wonders if this has to do with problems with the computerized system. When asking Alberto, he explained that one of the vendors in the northern area had to assist him for several days since the accountant who manages the merchandise entry and exit system was out due to illness and the Human Resources Department did not resolve it in time. . Rosaliz was aware of the situation. Alan added that during that same week she was visiting the warehouse and could notice an excess in the inventory of paper, a product that, according to her, had already alerted, did not show movement in sales. Alberto pointed out that Rosaliz had informed about a possible purchase of said material, but never received a confirmation. Rosaliz indicated that he understood that the merchandise had been returned to the supplier. Alan is very concerned about everything that has come out of the meeting and requests an emergency meeting with the entire management team. The main topic: internal control. What is the topic of control in this case. Identifies all internal control issues that arise from the case.
Rosaliz has been working for ten years in a food and institutional product distribution company that provides services in Puerto Rico and the Caribbean. The company supplies groceries, frozen foods, dairy products, beverages, paper, disposable products and public hygiene items to hotels, restaurants, fast food establishments and public and private institutions. After many years of effort and long hours of work, two years ago she was appointed Sales Manager and, since then, she has been in charge of 15 vendors around the island.
Rosaliz holds meetings with the Sales group every Monday at 8:00 a.m. m. In these meetings, the priorities of the week are discussed in terms of sales, delivery routes of purchase orders and particularities that affect customers. She is very dexterous and has shown the ability to deal with all the situations that come her way on a daily basis. After finishing today's meeting, Alan, her supervisor, calls her into the office to discuss various issues related to the term that just ended. Alberto, the warehouse supervisor, is also in the office. Alan shares his concern about declining revenue, particularly from customers who buy groceries and frozen foods from him. The data is presented below:
|
Year |
Groceries |
Frozen |
Dairy |
Drinks |
Paper |
Disposable |
Hygiene |
|
1Qtr. 20 * 2 |
$8,500 |
$3,800 |
$2,400 |
$1,700 |
$2,800 |
$1,350 |
$1,600 |
|
1Qtr. 20 x 3 |
$6,000 |
$2,900 |
$2,300 |
$1,850 |
$2,800 |
$1,500 |
$1,800 |
|
Difference |
-$2,500 |
-$900 |
-$100 |
+$150 |
$-.-- |
+$150 |
+$200 |
However, it indicates that it had already reported to the IT department
certain inconsistencies between the data entered in the purchasing module of the ERP system that caused errors in the orders. However, he is not aware of what has happened with this problem. Alberto indicates that if he receives an order wrong through the system, the shipment of the merchandise will go wrong too, but he cannot stop the shipment of the merchandise. In addition to this, Alan has been receiving information on stock outs and wonders if this has to do with problems with the computerized system. When asking Alberto, he explained that one of the vendors in the northern area had to assist him for several days since the accountant who manages the merchandise entry and exit system was out due to illness and the Human Resources Department did not resolve it in time. . Rosaliz was aware of the situation. Alan added that during that same week she was visiting the warehouse and could notice an excess in the inventory of paper, a product that, according to her, had already alerted, did not show movement in sales. Alberto pointed out that Rosaliz had informed about a possible purchase of said material, but never received a confirmation. Rosaliz indicated that he understood that the merchandise had been returned to the supplier. Alan is very concerned about everything that has come out of the meeting and requests an emergency meeting with the entire management team. The main topic: internal control.
What is the topic of control in this case.
Identifies all internal control issues that arise from the case.
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