Reference no: EM13339874

1. Read the following information about Go-Go Corporation. 

2. Determine how each of the issues at Go-Go relates to one or more of the eightfactors of the internal environment (NOT components of COSO.)

• Factors of internal environment include risk management philosophy, risk appetite, board of directors, etc.

Some issues relate to only one factor, some relate to more than one factor.  If you believe more than one factor of internal environment applies to a specific issue, then also identify which factor is the most relevant choice. 

You should begin (or continue) to connect and relate topics covered previously to the current topics under discussion.  For example, although this assignment primarily relates to COSO Internal Environment, you should also consider the issues in relation to what you know about SOX (Sarbanes- Oxley), fraud and business processes.

1. Go-Go has reported increases in EPS for each of the past six years.  However, earnings during the current year have leveled off and may decline.

1. Go-Go has written policy and procedures manuals for customer, vendor and employee relations.  The policies and procedures appear adequate and typical.
2. The new information systems project for an enhanced network firewall appeared to be on a very aggressive implementation schedule.  When interviewed, the IT manager said that even if he put all the IT employees on the project full-time for the next two years, the project still couldn't be completed on time.  The IT manager indicated he had spoken to upper management about the issue, but upper management did not take any action.
3. One of Go-Go's primary strategies is to achieve consistent growth.  The capital budgeting policy indicates a required payback period of 24 months or less and an internal rate of return that exceeds cost of capital by 6% for all new investments.
4. While touring the facilities you noticed several employees in the purchasing department wearing clothing with logos from Go-Go's major suppliers.  Also, while interviewing the Operations manager, you noticed a picture of him and three other top executives on a fishing boat named after one of Go-Go's major suppliers.
5. The accounting information systems and internal controls appear to be well-designed and adequate.