Atlanta Home Loan

Memo

I appreciate for giving the foundation data of your organization. In light of the data given, it appears to be deficiencies in the control system executed within the operation. These control inadequacies were one of the primary causes that permitted individuals to increase unlawful control over Atlanta Home Loan. To keep this from happening again, it is important to distinguish the fundamental issues that caused the organization to fall, create other options to apply later on, and evaluate these options to see which controls would be most profitable to your future business.

Control Analysis Before and After School

Before starting Executive MBA program at the university of Southern California in Los Angeles, your principle control system was action and result controls. Action controls were demonstrated in several control areas that are direct monitoring of the credit inquiry of each loan application, close monitoring of the loan application and their trends to identify any irregularities, receiving brokers checks overnight at office or direct wiring of money to company’s general account, receiving funds directly from the proceeds at closing. Result controls were demonstrated through Atlanta Home Loan’s compensations to the loan officers based on who originated the deal.

Since the college began, in addition to the current controls, you have set up remote observing framework to monitor representatives' day by day exercises and in addition sent every corporate mail to California. These are additional types of action control. Given that Wilbur creates incomes to the organization, you repay him through commissions. This is an outcome control.

As per the analysis, it appears that Atlanta Home Loan in the beginning used only two controls out of four that is used action and result controls but did not use personnel and cultural controls. Action controls rely on upon individual exertion in observing the practices of representatives, it doesn't advance objective coinciding inside the firm. Result controls give self-sufficiency or inspiration to representatives to endeavor better as a group, yet the linkage amongst results and actions may not generally be great.

In terms of Atlanta Home Loan, action and result controls are suspected to fraudulent as they are assessed taking into account the perception or result the organization; they are a greater amount of receptive than proactive control frameworks. For example, there was a lack of segregation of duties within the departments of your firm. In addition, there is a lack of monitoring of loan applications once they are past the loan officer level. Wilbur had the use and privileges of Atlanta Home Loan, along with that he was able to conduct human resources function at the same time have the authority to pay any office expenses. Further, signed blank checks were made available to the company management during your absence. These are control deficiencies that are visible for staff and are easy targets for misappropriations.