Overview

For this project, you will focus on identifying and mitigating risks associated with an accounting information system (AIS). Using your knowledge of financial statements, you will review select financial statement accounts (general ledger accounts) of an organization that were processed through an AIS and identify any inconsistencies or anomalies among the financial accounts and subsidiary journals that could be an opportunity for risk. In your role as a professional accountant, you will experience internal and external controls within accounting information systems that will help mitigate risk.

Scenario

You are a business analyst at a small direct-to-consumer organization and have been tasked with verifying the integrity of the accounts payable process. You will compare select general ledger data with other journals to prove the ledger, identify areas of risk, and determine whether appropriate internal and external controls are present. You will need to draft a memo to the chief financial officer (CFO) to communicate any findings.

Directions

For this project, you will use select financial data provided in the Supporting Materials section to perform an analysis of the subsidiary and financial statement (general ledger) accounts to identify any account irregularities (red flags). You will review current internal and external controls using specific financial data to identify inconsistencies or anomalies that provide opportunities for risk. Then communicate any findings in a memo using the Project Two template found in the What to Submit section.

Specifically, you must address the following rubric criteria:

1. Analyze the state of the company's current financial controls.
   1. Use Poseys Pet Emporium Accounts Payable Policies and Procedures and Accounts Payable Ledgers and Journals found in the Supporting Materials section.
   2. Include any internal or external controls found in the guide.
2. Identify inconsistencies and anomalies in controls. Include the following details in your response:
   1. Identify any discrepancies in the controls.
   2. Identify numbers that appear irregular (red flags).
3. Identify risks for potential fraud, stealing, or information exposure by reviewing the general ledger/journal numbers. Consider the following in your response:
   1. Determine whether established security procedures are being followed.
   2. Examine roles and access to data.
   3. Determine if approval paths meet the level of security for the task.
4. Explain the need for risk mitigation based on the scenario. Include the following details in your response:
   1. Identify inconsistencies or anomalies that require risk mitigation.
5. Summarize your findings based on your analysis. Include the following details in your response:
   1. Identify any inconsistencies or anomalies present.
   2. Explain the risks discovered.