DESKTOP

SOLUTIONS:
AUDIT OF THE
ST. LOUIS
BRANCH

AMIRA NUR AFIQAH 172018976

FATIMA ARIENA 181019702
LIN XUE 163917748
CASE SUMMARY
• Desktop Solutions Inc’s Internal Audit
staff audited the St. Louis branch of the
Operations Group.
• overall judgement: St. Louis branch’s
administrative process was unsatisfactory
to support the attainment of branch
business objectives.
• The auditors focused more on the
equipment inventory and account
receivable.
• They took two months to complete the
audit.
SWOT ANALYSIS
STRENGTHS
• The Desktop Solutions produced a broad line of printing and scanning systems for desktop
printing/applications.
• The company’s revenues were over $400 million in 1995.
• The company also sold printing and scanning suppliers such as toner, developer and paper.
• The company is a worldwide marketing and sales organization.

WEAKNESSES
• The new functional organization make it hard to maintain good communication between personnel in
the different functions of the branch.
• Only three of the internal auditors were CPAs and the accounting/auditing personnel were in the
minority.
• Audit of the St. Louis branch in 1993 uncovered some deficiencies in the branch equipment control.
OPPORTUNITIES
• If they maintained a good communication, then it would be easier for them to ensure that all the tasks
that needed to be done are being done efficiently.

THREATS
• If there was a challenge in maintaining good communication, then it is hard to ensure that the
equipment would be installed promptly, that billings would be accurate, and that problems would be
resolved with a minimum of hassle.
 IDENTIFIED
ISSUES
• The functional organization are not centralized for all of
the branches. Therefore, there is a problem when the
branches need to communicate with one another and
there is barrier due to the organization.
• The equipment administrator took a physical inventory
of all equipment at the warehouse, matched it with the
Non-Revenue Report (NRR), and reconciled the
differences only at the beginning of each month.
• The management does not hold the EA accountable
when there was lost of inventory and charged the
branch the net book value of the lost equipment if the
equipment is not found within 90 days.
• The management also did not define the responsibilities
clearly because some of the employees have more
tasks then the other in the equipment control.
• Branch management was not involved in the monitoring
and maintenance of the equipment control process.
• Control management did not maintain effective contact
with marketing and service management to ensure that
the equipment control process was operating properly.
 • Centralized management of all branches
• Centralize the management of all branches and
establish a leading organization. The branches will
be managed by these leaders.
• Establish connections between branches
• You can use WeChat or Facebook or WhatsApp to
establish a large group chat. The manager collects
personal contact information and then forms a group
chat. The same department in the branch can also
organize group chat.
• Need professional internal auditors.
• Provide training for internal auditors without
ALTERNATIVES qualification certificates,or send them to advanced
learning, and encourage them to learn professional
knowledge using bonuses.
• Establish clear responsibilities to managers
• The company should clarify the responsibilities of
each position. If there are managers or employees
who cannot perform their duties seriously, they will
be punished in varying degrees according to the
number of times, such as deducting bonuses to
reduce remuneration.
• Distribute employee tasks evenly.
• Establish a team to monitor and maintain the equipment
control process in branch management.
 DECISIONS AND
WAYS TO
IMPLEMENT
• Centralize management style across all branches
• Select a system that fits the company culture
• Choose a system that align with DSI’s
goals
• Be patient during the transition
• Establish new division to speed up
reconstruction process.
• Critical communication
• Communicate as partners to the
managers
• Ensure proper documentation
• Focusing on thorough documentation of
the process will aid in the organization
becoming leaner and more efficient
 • Centralization refers to a setup in which the
decision-making powers are concentrated in
a few leaders at the top of the
CONCLUSION organizational structure. Decisions are
made at the top and communicated to
lower-level managers for implementation.