1.1This report has been prepared to cover the requirements of AAT learning assessment are internal controls and accounting systems 1.2This report investigates the accounting system in place within Inkwell Ltd with regards to making recommendations to improve the systems and controls in place to protect it and reduce systems exposure to fraud 1.3As part of the investigation into the system the report also looks at the organisation needs from the system. Appropriate recommendations for improvement are made. 1.4The report also analyses the recommendations made in terms of the costs and benefits and analysis potential fraud as a risk to the organisation
Executive Summary
2.1 This report has been written on behalf of the Finance Director of Inkwell Limited. Its purpose is to investigate and make suitable recommendations for the improvements to the company’s internal controls and accounting systems and assign such improvements to a cost benefit analysis.
2.2 A complete examination into the operation of the accounting function was carried out and a review of each staff members job role.
2.3 Preliminary findings show the accounts function is struggling to operate effectively due to levels of understaffing and poorly managed and untrained work force. This coupled with the non-compliance and lack of internal controls procedures prevents an anti-fraud culture and is threatening work capital levels preventing the continued expansion of Inkwell Limited.
The Essay on Recommendation Brief for an Internal Auditor
The client has a problem with an out of control system. So, the client is asking for a recommendation to hire an internal auditor. In this recommendation brief the background benefits will be discuss. In the same brief the justifying the benefits of using the internal auditor will be discuss. In conclusion a recommendation on a person whose has the background for the auditor. Benefits of Internal ...
2.4 Several areas have been identified as the main cause of this and include the part time employment of two key workers within the Sales and Purchase ledger departments, failure to support colleagues workloads during periods of absence, poor credit control procedures, a relaxed attitude from management regarding to adherence to company policies and a fragmented accounting package currently in operation to support the business.
2.5 It is recommended that the two remaining part time employees within the accounts department be employed on a full time basis bringing there hours in line with the rest of the department in order to aid and support the key operations of the function. Should the extension not suit those currently employed in the role, two additional employees should be employed to support the department on a part time basis to make up the difference in hours.
2.6 It has been identified that the cost associated with the employment of additional members includes an annual cost of £8486 per employee. Benefits identified with this investment includes a reduction in overtime premium paid to workers to support the department and cover for workers when absent.
