| Course | ACC 315 Accounting Information Systems |
|---|---|
| Module | Module 3 |
| Paper type | undergraduate internal control analysis with a COSO-based control matrix |
| Length | About 1,050 words, 6 pages |
| Format | APA 7 student paper |
| School | Southern New Hampshire University |
| Program | BS Accounting |
| Updated | October 2026 |
Free sample paper for ACC 315 Module 3
Where Do the Gallons Go? A COSO-Based Internal Control Analysis of Wholesale Propane Purchasing and Inventory
[Student Name]
Southern New Hampshire University
ACC 315: Accounting Information Systems
Module Three Assignment
[Instructor Name]
[Date]
The organization, setting and figures below are a composite written as a model document. No real employer, client, colleague or patient is described.
Where Do the Gallons Go? A COSO-Based Internal Control Analysis of Wholesale Propane Purchasing and Inventory
Introduction
Last year the Vermont fuel dealer at the center of these samples bought 2.67 million gallons of propane from a wholesale terminal and billed customers for 2.6 million gallons. About 70,000 gallons, or 2.6 percent, cannot be explained, worth roughly $90,000 at wholesale cost. Some loss is normal: meters drift, temperature changes the volume of liquid propane and small amounts are vented in transfers. The company's outside accountant treats a loss near 1 percent as normal for a plant of this size. The gap above that is either error or theft, and the company has no process that would tell which. This paper applies the COSO internal control framework to the purchasing and inventory process and recommends controls a five-person office can afford.
The Process
A dispatcher orders transport loads of about 9,000 gallons from the terminal under a supply contract. A contract hauler picks up the load using the company's terminal card and delivers it to the bulk plant, where the plant manager reads the storage tank gauges before and after unloading and signs the bill of lading. The terminal bills the company weekly for loads, and the controller pays the invoices. Delivery trucks fill at the bulk plant each morning; drivers record the truck meter but not the plant meter. Customers are billed from paper delivery tickets as documented in Module Two. Nobody reconciles terminal purchases, plant gauge readings, truck fills and gallons billed.
COSO Assessment
The COSO framework, issued in its current form in 2013 and summarized by Romney et al. (2021), defines internal control through five components. Applied to this process:
Control environment is the company's strength. The owner works in the business daily, sets clear expectations and is respected by staff. Its weakness is informality: there is no written code of conduct, no policy on employee use of company fuel and no expectation that losses are reported.
Risk assessment is missing. The company has never estimated what loss rate is acceptable or where losses could arise, so the 2.6 percent figure surfaced only when the outside accountant compared annual totals.
Control activities exist only at the edges. The terminal card limits who can pick up loads, and the plant manager signs bills of lading. There are no reconciliations, no review of terminal invoices against plant receipts and no physical security over the plant's loading meter after hours.
Information and communication are fragmented. Purchase data is in the terminal's weekly invoices, plant data on handwritten gauge logs and sales data in the accounting package; none of them meet.
Monitoring is limited to the annual review by the outside accountant. Nobody looks at gallons monthly.
Research supports concern about the pattern. Doyle et al. (2007) found that weaknesses in internal control are concentrated in smaller, younger and more complex firms, and Ashbaugh-Skaife et al. (2008) found that firms reporting control deficiencies had lower-quality accruals and that remediation improved them, evidence that controls affect the reliability of reported numbers, not only theft.
Control Matrix
Table 1. Control Matrix for Propane Purchasing and Inventory
| Risk | Step | Existing control | Recommended control | Type | Owner and timing |
|---|---|---|---|---|---|
| Loads billed that were never received | Terminal invoice | Plant manager signs bill of lading | Match each invoiced load to a signed bill of lading before payment | Preventive | Controller, weekly |
| Hauler diverts part of a load | Delivery to plant | None | Compare terminal-loaded gallons with plant gauge gain for each load | Detective | Plant manager, per load |
| Unauthorized loads on terminal card | Pickup | Card held by hauler | Card limited to scheduled loads; weekly terminal report reviewed | Preventive and detective | Dispatcher, weekly |
| After-hours truck fills | Bulk plant | Gate lock | Locked loading meter with fill log; camera at loading rack | Preventive | Plant manager, daily |
| Truck gallons not billed | Delivery | Paper tickets | Reconcile daily truck fill with gallons on tickets plus truck gauge change | Detective | Billing clerk, daily |
| Employee use of company fuel | Delivery | None | Written policy; employee accounts billed like customers | Preventive | Owner, ongoing |
| Gauge reading errors | Plant inventory | Handwritten log | Monthly physical inventory with temperature correction | Detective | Controller, monthly |
| Losses not noticed | Overall | Annual review | Monthly gallons reconciliation reported to owner | Detective | Controller, monthly |
Priorities for a Small Office
Not every control is worth its cost in a five-person office (Romney et al., 2021). Four controls offer the most protection for the least effort. The monthly reconciliation of gallons purchased, gallons in plant and truck inventory and gallons billed is the most important, because it turns a loss discovered once a year into one noticed within weeks. Matching each terminal invoice to a signed bill of lading before payment costs minutes a week and prevents paying for loads never received. A daily truck reconciliation, comparing each morning's fill with the gallons on that day's tickets, is the control most likely to reveal diverted deliveries. And a locked loading meter with a fill log is a one-time cost of a few thousand dollars. The camera, temperature-corrected inventories and terminal card limits can follow once the first four show where the losses occur.
Because the controller pays invoices and would also perform the monthly reconciliation, the owner should review and sign the reconciliation each month as a compensating control. Segregation of duties is the textbook answer to that conflict, but in an office of five it would mean hiring a sixth person, which costs more than the risk. An owner's signature on a one-page reconciliation, with questions asked when the loss rate moves, gives most of the protection for almost none of the cost.
The controls also need a communication step. Drivers and the plant manager should be told why the reconciliations are starting and what the company expects, so that the new checks are seen as protecting the business rather than accusing staff. A short written policy on fuel use, signed by every employee, completes the control environment component.
Conclusion
The distributor's control environment is sound in spirit but informal, and its control activities stop at the edges of the process. A monthly gallons reconciliation, invoice matching, daily truck reconciliations and a locked loading meter would bring the process within COSO's components at modest cost. If losses fall toward the normal 1 percent, the company recovers about $55,000 a year; if they do not, the reconciliations will show where to look next.
References
Ashbaugh-Skaife, H., Collins, D. W., Kinney, W. R., & LaFond, R. (2008). The effect of SOX internal control deficiencies and their remediation on accrual quality. The Accounting Review, 83(1), 217-250. https://doi.org/10.2308/accr.2008.83.1.217
Doyle, J., Ge, W., & McVay, S. (2007). Determinants of weaknesses in internal control over financial reporting. Journal of Accounting and Economics, 44(1-2), 193-223. https://doi.org/10.1016/j.jacceco.2006.10.003
Romney, M. B., Steinbart, P. J., Summers, S. L., & Wood, D. A. (2021). Accounting information systems (15th ed.). Pearson.
What the ACC 315 Module 3 instructions ask for
The Module Three assignment in ACC 315 usually asks you to analyze internal control over a business process, often the expenditure or revenue cycle, using the COSO internal control framework. You are expected to identify the risks of error and fraud at each step, evaluate existing controls, and recommend controls classified as preventive, detective or corrective. Many versions ask for a control matrix or table and a discussion of the five COSO components: control environment, risk assessment, control activities, information and communication, and monitoring. Recommendations should be specific about who performs each control and when, and should consider cost and the size of the organization, since a small office cannot separate duties the way a large company can.
How this ACC 315 Module 3 internal control assignment example is built
This sample analyzes how a propane distributor buys wholesale propane at a terminal, hauls it to a bulk plant and sells it from delivery trucks. Last year it bought 2.67 million gallons and billed 2.6 million, leaving about 70,000 gallons, or 2.6 percent, unexplained. The paper assesses each COSO component in turn, finding a strong owner presence but no formal risk assessment and no monthly inventory reconciliation. A control matrix lists eight risks, from unauthorized loads charged to the terminal account to diverted truck deliveries, each with an existing control, a recommended control, its type and owner. A final section ranks controls by cost and impact and recommends four to implement first.
Where the ACC 315 Module 3 rubric puts the points
The ACC 315 internal control rubric generally scores the identification of risks, the evaluation of existing controls, the quality and specificity of recommended controls, correct use of the COSO framework and organization. Top papers link each control to a specific risk and step, classify it correctly as preventive or detective, name who performs it and when, and weigh its cost against the risk. Graders reward awareness of compensating controls where segregation of duties is impossible. Deductions are common for generic recommendations, such as implement segregation of duties, for confusing the COSO components with control activities, and for ignoring monitoring. A matrix or table makes it easier for the grader to award each row.
ACC 315 Module 3 help: the mistakes that cost points
Students most often lose points on this assignment by recommending controls that do not match the risk, by listing COSO components without applying them, and by ignoring the company's size. A five-person office cannot have separate people for every duty, so compensating controls such as owner review are often the realistic answer. Cases built on the revenue cycle, payroll or a nonprofit work the same way; send yours and we will walk its steps. A useful method is to walk the process one step at a time and ask what could go wrong at that step before thinking about controls; the matrix then writes itself and covers the process from end to end.
Get ACC 315 Module 3 written to your instructions
Send the ACC 315 Module 3 case and instructions. The paper will assess the process against the COSO components, build a control matrix that pairs each risk with a specific control and explain which controls fit the company's size and budget. A first sample is free, usually inside two days. The paper above is an original model document written by our desk, not a submitted student paper and not an official Southern New Hampshire University document.
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ACC 315 Module 3 questions, answered
Where can I find a free ACC 315 Module 3 internal control sample?
This page shows a full ACC 315 Module 3 internal control analysis with a COSO-based control matrix for wholesale propane purchasing and inventory.
What are the five components of COSO internal control?
Control environment, risk assessment, control activities, information and communication, and monitoring activities.
What is the difference between preventive and detective controls?
Preventive controls stop errors or fraud before they occur, such as authorization limits. Detective controls find problems after they occur, such as reconciliations.
What is a compensating control?
A control that reduces risk when an ideal control, such as full segregation of duties, is not practical, for example an owner reviewing transactions monthly.
How do you write a control matrix?
List each risk, the process step where it arises, the existing control, the recommended control, its type and who performs it and when.