Evaluation of Internal Control Systems at Adam & Co.

Running head: ACCOUNTING INFORMATION SYSTEM
Accounting Information System
Name of the Student
Name of the University
Author Note

CASE STUDY – ADAM & CO.1
Executive Summary
The primary purpose of this report is to conduct a thorough evaluation of the various internal
control systems of the company Adam &Co. These systems include the purchase, cash
disbursements and the payroll system. An overview of the systems is initially presented with the
help of flowcharts. This is useful in providing a brief and accurate analysis of the systems
implemented by the company. In order to obtain an idea of the strengths and weaknesses of
every type of internal system, an analysis of the available sources of literature is conducted.
After this, the report ends with providing advice to Adam &Co. about the ways in which their
existing weaknesses in each of the department can be overcome.

CASE STUDY – ADAM & CO.2
Table of Contents
Introduction..................................................................................................................................3
System flowchart of purchases system........................................................................................4
System flowchart of cash disbursements system.........................................................................5
System flowchart of payroll system.............................................................................................6
Description of weaknesses and risks of the purchases system.....................................................7
Internal control weakness in the Cash Disbursements System....................................................8
Description of internal control weakness in the Payroll System.................................................9
Conclusion.................................................................................................................................10
List of References......................................................................................................................12

CASE STUDY – ADAM & CO.3
Introduction
Adam & Co. is operating as a wholesale business in industrial supplies. It is based in
Perth. The inventories required for the production process are imported from manufacturers
operating in Thailand, Vietnam and China. The company has implemented a centralised
accounting system with various terminals in place at different points. The major accounting
systems that are prevalent in the organisation are called the Purchases system, Cash Distributions
system and the Payroll system. There is a well organised structure behind the implementation of
these systems within the organisation. At present, this system is considered to be very efficient
and duly meeting the requirements and necessities of the organisation. However, the
management acknowledges that the current system may be limited in certain aspects. These
systems are initially presented in the form of a flowchart to properly understand them and their
roles in the running of the business. After which, a robust study of these systems is conducted to
find whether there are any flaws in the particular systems and the methods that should be
implemented to overcome them.