AMAZON INTERNATIONAL
Washington DC 85965Az,
Amazon Company Office of the Auditor General
February 3rd, 2016
MEMORANDUM TO: CHIEF FINANCIAL OFFICER (CFO)
The main intention of this memorandum is to disseminate crucial information, promote clarification of work sampling, and risk issues as mentioned above. It is the rightful duty of the management to maintain books of accounts and financial statements to the maximum efficiency possible. There have been rare alarms regarding the integrity of the organization in the recent audit report of the Company, which was based on observations from a few months back. The examination of the financial statements was for the period which reflected a financial position on the year-end of 2014 i.e. December 31st. Many samples were taken from the total population for each category of transactions and were tested for occurrence, completeness, existence, accuracy and a cutoff was established. The two major methods mobilized for the sampling were simple random sampling and systematic sampling. The online functioning of Amazon made it quite difficult to track the total Company transactions. Systems checks were thus what followed by the team as per their analysis. There needs to be the immediate appointment of a systems auditor and the formation of an audit committee that works independently so that the financial transactions can be reviewed on a quarterly basis. This will help the Company ensure the related stakeholders that it is in compliance with accounting standards globally.
For the mitigation of any kind of traceable financial risks, the recommendation would be a timely review of the internal control system and a periodic systems check (Forbes.com, 2016). There will thus be assurance that an unofficial person will not hold access to records of transactions. Another point of consideration should be the rotation of employees, also ensuring that managerial position is not held by one person for a long time. There should also be proper segregation of responsibilities so that unwanted breach of conducts is refrained. A particular manager should not be held responsible for all the activities, and division of labor should be well accounted for.
Yusuf Siddiqui
Chief Auditor
AMAZON INTERNATIONAL
Washington DC 85965Az,
Amazon Company Chief Financial Officer
February 3rd, 2016
MEMORANDUM TO: BOARD OF DIRECTORS (BOD)
Recommendations for Risk Mitigation
There have been particular chief concerns regarding the Company’s deficiencies as concluded from the audit report of external examination of our financial statements. Recommendations have been made accordingly. It is the obligation of the management to indulge in the preparation of financial statements as per the principles of GAAP (Generally accepted accounting principles), and there seems to be a lag in our part of this duty. The Company needs to adopt an internal control structure that is in line with global standards so that the probability of misstatement of financial matters can be taken in hand. The online transaction nature of the Company creates a higher risk for the efficiency of internal controls. The audit team is concerned about the same. The results from the management audit team points out that there is degradation in the management- employee rapport and that there are spaces of improvements. As the relations between employees improve, there will be the impetus for them to get motivated from the management and this will show positive influence on production. Job rotation is another point to be noted. One department should not be solely responsible for any given activity. Deceitful activities can then be controlled.
The findings clearly suggest that there is a need to appoint a system analyst so that system checks can be performed on a periodic basis (Docs.djangoproject.com, 2016). There needs to be the strong implementation of internal controls, which is of global standards. Skill management should be given top priority wherein the financial benchmarks of the company can be kept intact with competent employees.
For the implementation part, given the organizational structure, strategies of centralization and decentralization need to be integrated into one so that communication flow and supervision become smoother. The relationship gap between the management and employees could be filled by organizing more social events (Smith, 1990). The social audit caution of a cringed associate can then be avoided. Skill development could be speeded up with periodic and value-based training.
Teressa Johns,
Chief Financial Officer
References
Docs.djangoproject.com,. (2016). System check framework | Django documentation | Django. Retrieved 4 February 2016, from https://docs.djangoproject.com/es/1.9/ref/checks/
Forbes.com,. (2016). Forbes Welcome. Retrieved 4 February 2016, from http://www.forbes.com/forbes/welcome/
Smith, A. (1990). Bridging the Gap between Employees and Management. Public Relations Journal,46(11), 20. Retrieved from https://www.questia.com/library/journal/1G1-9593409/bridging-the-gap-between-employees-and-management
