AMAZON INTERNATIONAL
AMAZON INTERNATIONAL
Amazon Company Office of the Auditor General
November 15th 2015
MEMORANDUM TO:CHIEF FINANCIAL OFFICER
FROM: xxxxxxxxxxxxxx
Auditor General
SUBJECT: Audit Memorandum-Sampling Work and
Recommendationsto Mitigate Risks
This memorandum is intended to provide the necessary information and clarify some of the issues which are highlighted above. The role of the management is to keep proper books of accounts and preparation financial statements. The results from the audit report carried out on the past few months have raised some concerns in the organization. We have audited the financial statements which comprises statement of financial position of the year ended December 31st 2014. We have taken large samples of transactions of every class with the aim to determine its occurrence, accuracy, completeness and cut off. The simple random sampling and systematic sampling methods were used when analyzing all the transactions. Since most of the Amazon Company transactions are carried online, then it has been a bit challenging to trace all the transactions. This prompted the audit team to perform system checks. Amazon should have its own systems auditor and an independent audit department to review all the financial transactions in every 3 months. This is aimed at ensuring that, Amazon will prepare financial statements that meets international accounting standards.
In order to mitigate any possible financial risks, we recommend that the firm must frequently review its internal control systems and perform system checks. This will ensure that no unauthorized persons will have access of transaction records. Secondly, Amazon must ensure that its employees are rotated and none of them one should hold certain managerial position for longer periods. We also recommend that Amazon must segregate its duties so as to reduce any attempt of theft or corruption. There should be no manager who performs everything but duties and responsibilities are shared among the all the officers within the various departments.
Yours faithfully,
Chief Auditor
AMAZON INTERNATIONAL
Amazon Company Chief Financial Officer
November 15th 2015
MEMORANDUM TO:BOARD OF DIRECTORS
FROM: CHIEF FINANCIAL OFFICER
xxxxxxxxxxxx
SUBJECT: Audit Memorandum-Findings of the audit
Recommendations to Mitigate Risks
The external audit report that concerning the financial statements released last month have indicated some internal deficiencies and made some of the recommendations.The management is responsible for preparing the financial statement in accordance in accordance to generally accepted accounting principles, the firm therefore, must put in place structures internal control structures that meetsinternational standards in order to reduce the possibility of occurrence of financial material misstatement in the financial records and reports. Since most of the firm’s transaction are carried online, effectiveness of the firm’s internal controls are at risk. This has been a point of concern of the auditor. The management audit indicates that the relationship between the management and the employees has deteriorated and the firm has to improve on this. Good relations amongst employees will motivate the employees to be satisfied with the management and thereby improve production.Another point is that the firm must ensure that all the duties in the organization must be shared by the respective departments. This will reduce the chances of fraudulent activities.
Based on the findings above, the firm therefore must outsource system analyst who will perform system checks. The internal controls is very key to firm and it has to meet international levels and all the information of the firm has to employ experts to this job. The firm has to maintain its financial standards and this can only be achieved by employing staff who are able to handle the job demands.
Inregard to implementation of strategy, my recommendation is that the firm needs to adopt a mix of centralized and decentralized strategy in supervision and communication within the organization. This will improve communication process in the entire organization and establish effective information delivery.Social events needs to be held more frequently in order to improve the relationships between the management and the employees. This will reduce the possibility of occurrence of constrained relationships as the social audit indicated. Regular trainings also is recommended in order to improve the abilities of the employees.
Yours,
Chief Financial Officer.
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