Atlanta Home Loan – Case Study

Thank you for providing the background progressment of your company. Based on the information provided, there appears to be deficiencies in the sustain establishments implemented within the ope proportionalityn. These figure deficiencies were one of the main causes that eachowed unintended individuals to gain unlawful run into all over Atlanta Home Loan. In order to preclude this from happening again, it is authorised to identify the main issues that caused the company to fall, generate alternatives to apply in the future, and evaluate these alternatives to see which controls would be most valuable to your future business.Control System AnalysisBefore be the EMBA, your main system of control was serve and result controls. Action controls were present in several control beas like a shot observe of the credit examination of each give screening close monitoring of the loan application/lead ratios and their trends to identify any irregularities receiving funds directl y from the proceeds at closing receiving brokers checks overnight at AHLs office or direct wiring of money to AHLs general account. Result controls were demonstrated by and through AHLs compensations to the loan officers ground on who originated the deal.Since the school started, in extension to the existing controls, you make water setup remote monitoring system to keep track of employees daily activities as well as forwarded all corporate mails to California. These are also forms of sue control. Provided that Wilbur generates revenues to the company, you compensate him through commissions. This is a result control.Generally, there are four types of common controls a devoted potbelly utilize when setting up their internal control systems results, action, and violence/cultural controls. As per the above analysis, it appears that AHL primarily used only action and result controls and lacked the use of the personnel department and cultural controls. Action controls heavily desire on your personal effort in monitoring the behaviors of your employees it does not grow goal congruence within the firm. Result controls provide autonomy or motivation for employees to strive better as a team, solely the gene linkage between results and actions may not always be perfect.In the case of AHL, action and result controls are susceptible to fraudulent acts as they are evaluated based on the observation or outcome the company they are more than of reactive than proactive control systems. For example, there is a lack of monitoring of loan applications once they are past the loan officer level. In addition, there was a lack of segregation of duties within the departments of your firm.Wilbur had the use and privileges of AHL, as well, he was able to go human resources function at the said(prenominal) time have the authority to pay any office expenses. Further, write blank checks were made available to the company management during your absence. These are control de ficiencies that are visible for staff and are easy targets for misappropriations.Besides several weaknesses in controls, AHL does not have a sound company dodging. It is important to develop a corporate-level strategy by establishing a functional organizational social system as well as strengthen your business unit strategy by setting up a mission education or a vision for your employees to realize.Preventing the Same Mistake from HappeningWe have identified the flowing controls implemented at AHL, some of the controls need improvements in order to hold the same problems from happening. AHL should to consider strengthening your action controls by implementing the electronic cerebrate to the actors files so you can see the entire loan application process remotely instead of only checking the status at the loan officers level. In addition, Segregation of duties should be enforced by having separate individual personnel handling loan applications, loan submissions, paying office expenses, human resources, clear payments, and signing checks, etc.This would require the coordination of personnel controls which helps an organization find the right people, braggy them a good working environment and the necessary resources to do their work. AHL should have a trained recruiting manager or an experienced staff to conduct the hiring and firing process. In addition, AHL should continue to establish a more stiff motivational compensation plan (through its result controls) that not only rewards the outperforming staff, but also encourages synergy and goal congruence for the organization.This will be complemented through the implementation of cultural controls. AHL can set company code of conducts and statements of values, throw an ethical tone at the top and promote employees in view more socially responsible. A companys culture can unite its employees or attract new employees as they share a similar set of values. The alternative controls in place could help pre vent your past mistakes and assist in hiring and rewarding trustworthy employees.RecommendationsAction, personnel, and cultural controls are three key controls that should be in place to reduce the fortune of the case events reoccurring. If you can tighten the current action controls via the help of engineering or an independent monitoring system, then the loan application to leads ratio could be significantly increased as it reduces the likelihood of any loan officers privately absorbing the loan applications without reporting them to the firm.A solid action control cannot be solely performed by your (one person), so implementation of personnel controls is all-important(a) which will allow you to recruit talented and trustworthy employees that prevent theft or fraud from reoccurring. Setting a clear mission statement and company corporate governance policy will provide an boilers suit cultural support to the company that will complement the application of action and personnel c ontrols. I hope the above memo can be a useful guidance for you in the future.