Pixystems Toy Company, Inc., is a leading manufacturer and distributor of children$$s toys across

the globe through third party distributors $($non$-$company owned stores$)$ and through their flagship

store located in New York. The company is headquartered in Cleveland, Ohio, and has

manufacturing locations in Brazil, China, Mexico, and across the United States. Product

development is also done in Cleveland with new products released every six months. The majority

of the toys manufactured by Pixystems are top sellers that are sell outs during holidays. Some of

their most well$-$known products include: toy cars, plush dolls, and electronic games.

The company does all back office processing at their headquarters where they have shared service

centers for accounts payable $($AP$),$ payroll, and inventory management. These shared service

centers handle processing of transactions related to these processes across the globe driving a

consistent process and controls. Customer sales are managed at the flagship store by the local sales

team while online sales and sales to distributors are handled at headquarters.

Pixystems recently hired a new CFO who is focused on improving the financial performance and

operational efficiency of business processes, including AP$,$ payroll, inventory, and sales. She has

challenged each of the managers of these business processes to identify areas for improvement and

quickly address errors.

The CFO has engaged internal control team to review these business processes using Pixystems$$

data and performing analytics. She would like internal auditors to identify control gaps, areas of

non$-$compliance and high risk, and provide her and the managers with insights gained through your

analytics. As an internal auditor, you are assigned to look specifically at the Purchase Order and

Payment, which are directly related purchasing transactions. You have been asked to pay particular

attention to the following areas:

$$ Identify potential exposure to fraudulent purchases and analyze trends and outliers.

$$ Explore whether the AP manager effectively monitored for duplicate or erroneous payment.

$$ The leverage of discounts for payments is not reviewed. Explore whether discounts only apply

to a certain group of vendors and whether Pixystems receives the appropriate discounts by

comparing payments with and without discounts.

Assignments:

You will leverage the data provided by Pixystems $($see the Data Overview for a high$-$level

explanation of data provided$).$ You must use Descriptive and Diagnostic analytics that provide the

insight the CFO is looking for. Specifically, you should conduct between $3-5$ additional analytics

that will add additional insight or that you feel would be of interest to the CFO, managers, or

auditors.

The CFO is expecting that you have visualizations representing the analytical procedures you

performed and assumptions you made. You will prepare a final report $($less than $5$ pages$)$ outlining

the following:

$$ Results of the analytics you performed along with your rational for performing

$$ Insight that the analytics you provided to the management team

$$ Recommendations your team has for improving Pixystems$$ processes

$$ Overview of any other issues that Pixystems should follow$-$up on