Bucks Phyz Internal Control Analysis

This assignment analyzes the internal controls of Bucks Phyz, highlighting organizational structure weaknesses and a high risk of fraud due to lacking controls. It recommends immediate implementation of corrective measures. Additionally, the report explores the feasibility of introducing corporate credit cards for Bucks Phyz, suggesting it as a beneficial opportunity but emphasizing careful allocation to key personnel to prevent fraud. The analysis draws upon various academic sources.

Running head: BUCKS PHYZ BUSINESS REPORT
Bucks Phyz business report
Name of the student
Name of the University
Author note

1BUCKS PHYZ BUSINESS REPORT
Executive summary:
This report has analyzed the Bucks Phyz from an accountant’s perspective and it has traced out
various flaws in the internal structure of the firm. Using the interviews of the employees of the
Bucks Phyz, the report has mentioned various issues of the firm. The report has found that the
firm has lack of internal control and proper code of conduct that lead the employees to fraud
activities. The report has also found that the new system of pricing of the firm is highly
complicated for the employees due to lack of proper training. One of the main concerns of the
report was to trace the impact of corporate credit card for the Bucks Phyz. The report has found,
though it will enhance the profitability firm, however it will enhance the scope of fraud among
the employees. To conclude the report has provided some recommendations for the firm and
traced out how it can enhance its performance.

2BUCKS PHYZ BUSINESS REPORT
Table of Contents
Introduction:....................................................................................................................................3
Summarised overview of Bucks Phyz sales process:......................................................................3
Internal control weakness of Bucks Phyz:.......................................................................................4
Impact of weakness on the organisation:.........................................................................................9
Impact of introducing corporate credit cards in Bucks Phyz:..........................................................9
Internal controls to minimize the impact of corporate credit card:.................................................9
Recommendation:..........................................................................................................................10
Conclusion:....................................................................................................................................10
Reference:......................................................................................................................................11

3BUCKS PHYZ BUSINESS REPORT
Introduction:
Bucks Phyz is one of a medium sized organisation that possess annual turnover of $2.5
million. The question, which has been asked in this question, is to represent a business report of
the Bucks Phyz reviewing the sales process of organisation. The report has reviewed the
company profile closely and while doing so, it has been found that the firm has gone through
major reform in the operating environment. The study of the Bucks Phyz’s internal organisation,
it has found that account department of the firm has been facing fraudulent behaviour and if the
trend continues, then firm will not be able to earn higher profit (Johnson, 2016). Thus, the
manager of the firm has been asked to his newly employed accountant to check revenue leakage
and analyze what can be done in order to control the situation. Besides this, the new accountant
is also asked to perform risk analysis of introducing corporate credit card for the Bucks Phyz.
This report is meant to provide the internal control analysis of Bucks Phyz and study the
feasibility of introduction of corporate credit card for the firm.
Summarised overview of Bucks Phyz sales process:
Bucks Phyz is one of a middle-sized firm in the Australia that has recently gone through
an organisation restructure in order to meet the market standards and overcome the issues of
fraud in firm’s activity. Bucks Phyz follows the new pricing tool of the business process that can
calculate offer prices accurately, which are introduced by the managers of the firms to attract
more customers (Marinesi, Girotra & Netessine, 2017). However, the business has faced issues
with the authorization policy, which is not aligned with manager’s policy making it ineffective.
Barry, who is head of sales of the Bucks Phyz argues that due to lack of proper mapping of the
introduction of the new pricing tool in the organisation, existence of standardized process and the
particular process has meshed with each other. Besides this, standardized offer template of the

4BUCKS PHYZ BUSINESS REPORT
firm available in the website of the Bucks Phyz is not up to the benchmark (Kumar & Arpana,
2016). In terms of quality of the credit checkout process, it can be said that there is lack of credit
worthiness and it returns C quality rating of the credit. Customer template available in website is
not alluring too leading the firm to face lower demand for their service.
Internal control weakness of Bucks Phyz:
Analyzing these factors, various internal control weaknesses of Bucks Phyz have found,
which are mentioned below.
Sales process Internal control weakness Impact Recommendation
Data Entry Process Data entry process is one of the
major issues related with the
Bucks Phyz. Lack of
information regarding the
access to the ERP system has
reduced the cast benefit ratio
for the firm. Besides this,
billing system of the firm does
not supply any guidance to the
users making it unworthy
(Balsam, Jiang & Lu, 2014).
Moreover, pricing template of
the firm is irrational and cost
benefit ratio is not justified for
the Bucks Phyz.
ERP access
to all the
employees
need to be
restricted
because it
can lead to
fraudulent
activates
(Shen,
Chen &
Wang,
2016).
Wrong data
in the
wrong field
Managers should
segregate the duties
of the workers and
employ such workers
who are able to insert
data properly in
proper field of the
template. Billing
software of the firm
need to be updated so
that both the
employees and the
user can get benefits
from it and it
become easy for
them to handle the

5BUCKS PHYZ BUSINESS REPORT
has
hampered
the
assessment
program
and the
cycle of
auditing the
Bucks Phyz
business,
which has
reduced the
efficiency
of the
firm’s
internal
control.
order.
New Pricing Tool The new pricing tool that has
been introduced in the Bucks
Phyz is not aligned with the
manger’s policy. Employees
are not well skilled and trained
to handle the software
smoothly.
New
software for
pricing is
not an easy
one to
handle
without any
proper
The deterioration of
sales of the Bucks
Phyz due to the
introduction of new
pricing tool can
easily be overcome
with proper training.
Mangers can

6BUCKS PHYZ BUSINESS REPORT
training and
instructions.
Thus, it has
hampered
the growth
of sales for
the firm. If
the trend
continues,
then it will
lead to a
devastating
situation for
the firm.
introduce new
strategies to educate
their employees and
align the manger’s
policy to overcome
the conflict.
Policy Of Authorization Bucks Phyz has a standardized
policy for the authorization,
however most of the managers
does not mandatorily follow
the rule (Yang et al. 2014).
When it
comes to
non-
compliance
with the
standardize
d process, it
gives the
managers
an
opportunity
Bucks Phyz need to
bring in modified
policy of
authorization that
should look into all
the factors that it can
stop the managers to
indulge themselves
into fraud activities.

7BUCKS PHYZ BUSINESS REPORT
to indulge
themselves
into the
fraud
activities
(Gino &
Ariely,
2015).
Head of
sales has
pointed out
that
activities
has caused
the Bucks
Phyz a
reduction in
revenue in
recent days.
Process Of Credit Check Process of Credit Check by the
Bucks Phyz has no issues;
however, according to Lucinda
there are various instances,
where the sales team does not
follow the process. In several
There is a
scope of
loss of
revenue for
the firm, if
it continues
It should be made
mandatory for the
sales team to adhere
with the process of
credit check.
Managers should

8BUCKS PHYZ BUSINESS REPORT
cases, it has been found that
credit checking has been done
after the issue of invoice.
to sign the
credit check
process
after issuing
the invoice.
bring in penalty in
case of avoidance of
credit checking,
which will bring in
efficiency among the
employees and
adherence with the
standard rules of the
firm.
Employee code Bucks Phyz does not have any
employee code that hampers
both the code of conduct of the
employees in the firm. It aids
to growth of personal
relationship among the
employees, which is not
beneficial for the performance
of the firm.
Lack of
employee
code in the
Bucks Phyz
can act as
the stimulus
to the
growth of
personal
relationship
(Vaníčková,
2017). This
will
enhance the
interest
conflict and
It is advisable from
the accountant’s
perspective to
introduce a employee
code, which can
mitigate the scope of
conflict and fraud
activity in the firm.

9BUCKS PHYZ BUSINESS REPORT
chances of
fraud can
be
aggravated.
Impact of weakness on the organisation:
Bucks Phyz has various issues with its structure and business process. Primarily, the firm
lacks credit worthiness, when it comes to their service and online template of the firm; it is not
alluring enough to attract new customers. Moreover, the Bucks Phyz credit rating comes under
the C category making it unworthy in the market (Kraft, 2015). Interviews of the staffs of Bucks
Phyz has portrayed that the firm has serious issues in its account section leading to reduction in
revenue earning. Thus, it is highly important for the firm to introduce new methods to check
these issues and address the leakage in accounting section.
Impact of introducing corporate credit cards in Bucks Phyz:
Introducing corporate credit card is a good option for the business to enhance their
market share (Audi, Loughran &McDonald, 2016). This card will make the reimbursement
process more simplified and the payment transferring will become easy. However, introducing
the corporate credit card will bring higher amount of risk and in absence of proper code of
conduct, it will lead the employees towards higher amount of fraud activities (Outwater &
Redmann, 2015).

10BUCKS PHYZ BUSINESS REPORT
Internal controls to minimize the impact of corporate credit card:
Corporate credit card need to be introduced to only those persons who are related with
the core business of the Bucks Phyz. It will reduce the scope of fraud activities by the employees
of the firm and enhance the performance of internal controls (Hilas, Mastorocostas & Rekanos,
2015). Finance department need to be tasked with authorisation capability and it will minimize
the issues with internal controls.
Recommendation:
Various steps can be taken by the manager in order to reduce the scope of fraud in the
firm and make the control mechanism more sophisticated. Recommendation for the Bucks Phyz
is as follows:
 Bucks Phyz need to enhance its internal control mechanism by introducing code of
conduct for the employees
 Introducing appraisal mechanism would be beneficial for the firm to encourage its
workers
 Need to upgrade its online template for sales and make it more alluring to attract more
customers
 There should be a training and quality analysis team who will be tasked to maintain the
performance of the workers
Conclusion:
The report has analyzed the internal control of the Bucks Phyz and has performed
feasibility check to introduce corporate credit card for the firm. The findings of this report
highlights that the firm is facing risk from their organisational structure and the chances of fraud

11BUCKS PHYZ BUSINESS REPORT
activity is high due to lack of proper internal controls. In order to overcome this, the report has
mentioned various recommendations that the firm need to implement with immediate effect.
When it comes to the introducing corporate credit card for the Bucks Phyz, then the report finds
that it will be a good opportunity for the firm to enhance its business, however, it need to be
issues to the key human resource personnel in order to avoid the scope of fraud.