Bella Windows Co. is a window manufacturer located in eastern Pennsylvania with roughly 150 employees in its facility. The Smith family founded it in 1994 because their children, who were architects, needed a specific window design that did not exist in the current market. The parents thought this window would be very successful, so they started a company that made specialty windows. Bella Windows Co.'s motto became "Quality Products, Quick Delivery." This drew a lot of retail customers from their competitors, which allowed them to rapidly grow to $50 million in sales the last three years. Bella Windows Co. developed a strong relationship with its customers and allowed them to purchase windows on account with the terms 2/10/30.
Bella Windows Co. is a window manufacturer located in eastern Pennsylvania with roughly 150 employees in its facility. The Smith family founded it in 1994 because their children, who were architects, needed a specific window design that did not exist in the current market. The parents thought this window would be very successful, so they started a company that made specialty windows. Bella Windows Co.'s motto became "Quality Products, Quick Delivery." This drew a lot of retail customers from their competitors, which allowed them to rapidly grow to $50 million in sales the last three years. Bella Windows Co. developed a strong relationship with its customers and allowed them to purchase windows on account with the terms 2/10/30.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required:
a. Create a document flowchart of the existing system.
b. Analyze the internal control weaknesses in the system. Model your response according to the six categories of physical control activities specified in SAS 78.
1.Transaction Authorization
2.Segregation of Duties
3.Supervision
4.Accounting Records
5.Access Control
6.Independent Verification
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