No Indicator Score Reasoning

1 Integrity and Ethical 3 We scored 3 out of 7 because there tend to be

Values sufficient integrity on the part of management, but the
integrity of employees are low.

It shows from the case conversation that the company

have an open door policy and encouraging employees
who have questions or concern about their
responsibilies to ask for help and also the owners of
Easy Clean, Co try to ensure that any problem is
resolved promptly. So its strengthens control
environment of Easy Clean, Co by the managements,
meanwhile the turnover of the employee is high, its
also weaken the integrity’s strength of company
2. Commitment to 1 We scored 1 out of 7 because there are no evidence
Competence indicating that employees appears to have the
requisite knowledge and skills. Also the
Management does not give specify the competence
needed for particular skills.

It shows from the case information that the

accounting department of Easy Clean, Co consist of 7
part time workers who are paid an hourly wage. They
also do not have accounting degree, except they are
college student majoring in Accounting. So it
weakens the control environment of Easy Clean, Co.

3. Board Directors of Audit 2 We scored 2 out of 7 because of the Board Directors

Committee Participation are not independent of management.

It is stated that Easy Clean, Co does not have an audit

committee which is typical of an organization this
size. They have informal board of director which
consist of the owners and their wives. So it weakens
the control environment of Easy Clean, Co.

4. Management’s 3 We scored 3 because eventhough the internal control

Philosophy and of monitoring risk does not adequately fulfilled,
Operating Style management is willing to reduce some business risks,
such as the owner has been looking forward to use
accounting software package to help them control
cost and set a formal budget. And they do action to
protect their assets by changing the lock every once
in a while.

5. Organizational Structure 1 We scored 1 out of 7 because of Organizational lines

 of authority and responsibility are not clearly defined.

It shows from the case that the work should be done

6. Assignment of Authority
and Responsibility
by the people who are available, assuming they are
familiar and capable of the tasks. It will lead to an
overlapping tasks performed by the owners and the
office manager. Work split between them are not
clearly defined. So it weakens the control
environment of Easy Clean, Co.
2 We scored 2 out of 7 because not all employess have
suitable background with their position, mos of them
is a college students . the employees are understeend
about their tasks and the procedures of their tasks, but
they are lack of competence, and also the training of
the new employee is doing only by the management

But tasks are consideration performed/ done by the

people who are familiarwith the task and who are
capble of doing it, but the owner laso said that they
still consideration the person who are availability.j
7. Human Resource 2 We scored 2 out of 7 because the employee only have
Policies and Procedures the background but lack of experience necessary for
their job duties. And this make the turnover rate is
high.

Form the case stated that The accounting department

consist of Accounting Student only work with the
company for a couple of years and generally leave as
soon as they graduate. So it weakens the control
environment of Easy Clean, Co.

Overall evaluation

We give 3 out of 7 to overall control environment of Easy Clean, Co. This is because we think
there are so many things that Easy Clean, Co has to do to improve their internal control. Such as
in human resource part that needs to set a single specific department to manage the employee and
set a clearly defined job description and responsibilities of each position. In other part,
eventhough there is control, but we think it is not strong enough to apply in uch a growing
company.