ACC 438 - Assignment - Excerpt from Apple Blossom Cologne Company Case (by Paul, J., Boston:  McGraw-Hill Irwin, 2003).

Apple Blossom is a small company.  There are no formal policies for assessing the risks that may impact the preparation of the financial statements in accordance with generally accepted accounting policies.  Company officers manage such risks informally.  Monthly budgets are prepared for each department head.  These reports are closely scrutinized, exceptions investigated, and explanations obtained for significant variances.

Organization Structure - An organization chart for the company appears below.

Required: Evaluate the organization chart from the standpoint of internal control (proper segregation of duties between authorization, custody and recording).  List any weaknesses in the structure, and suggest any changes that would help improve internal control.

A weakness in the treasurer duties is it should oversee the Credit Manager, Accounts Payable Clerk, and Accounts Receivable Clerk. Any position involving sales should report to the Treasurer.