You are a self-employed consultant who designs and evaluates internal control systems; you recently made a presentation to a local chapter of the Institute of Management Accountants. After the presentation, Barb approached you with some questions. Barb is the accountant for Top Notch T-Shirt Printing, a company that makes custom t-shirts for student clubs, professional organizations and other groups.
The process of producing shirts typically goes like this: (a) Receive an order in person, over the phone or via e-mail. The order includes the number, sizes and color(s) of t-shirts as well as the artwork. (b) Design or adapt the group's name and logo for the t-shirts. (c) Finalize the order with the client and establish the price; receive a 50% deposit from the client. (d) Purchase plain t-shirts. (e) Print the t-shirts. (f) Deliver the printed t-shirts and bill the client for the remaining 50%. (g) Receive the payment due from the client.
Barb has asked your advice on designing internal controls for Top Notch T-Shirt Printing.
Required:
a. Prepare a flowchart describing the general process and information flows at Top Notch T-Shirt Printing. (You can use a software if you want)
b. Prepare a Risk/Control Matrix for Top Notch T-Shirt Printing.