Ellery Company Case Summary
1. Describe the basic internal control procedures Mr. Ellery failed to implement?
Mr. Ellery as the Securency CFO, flopped in actualizing the inner control technique of giving every one of the reports that are required for an exchange made and included in the deceptive adulteration of a receipt for roughly $80,000, being cash paid to a Malaysian middle person for costs purportedly brought about yet in reality were not acquired.
The critical time for Mr. Ellery to demand for further information was the time the company entered into a contract with the Kayum Aksavest Malaysia. This will enable him to understand how to deal with the transaction that would be going on between the companies involved in the contract.
2. Discuss the case study with
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This brought problems later when it is realized and Ellery is got in fixing what was false in accounting. Ellery thought that he would follow the required internal control procedures and did not want to ask how things are done in Securency.
The other employees in the company told Mr. Ellery that he had to pay commission and he did not take any step of asking them why he had to pay it which then brought him problems later. It was good for Ellery to first get to know the company’s culture before performing such
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This made the company with its officials to be brought to answer the case in court. It was totally wrong for the company to operate without following the required procedures.
Non-compliance to the set internal control procedures affects the good corporate governance in many different ways. There will be no proper accounting records which lead to false financial statements. This will finally mislead the new investors and the existing shareholders.
1.3. Consider what governance measures Securency and the reserved bank could and should have implemented to prevent or limit the opportunity for such false accounting and poor corporate governance.
The governance measures that the two companies should have implemented are good documentation to prove that a certain transaction has taken place and also allow for reference in future records.
Institutionalizing documents utilized for monetary exchanges, for example, solicitations, inner materials demands, stock receipts and travel cost reports, can keep up consistency in record keeping after some time. Utilizing standard archive arrangements can make it less demanding to survey past records when hunting down the wellspring of an error in the
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