Internal Audit of Giant Eggplant Report 2022

Running head: INTERNAL AUDIT OF GIANT EGGPLANT
INTERNAL AUDIT OF GIANT EGGPLANT
Name of the student:
Number of the student:
Name of the university:
Author Note:

INTERNAL AUDIT OF GIANT EGGPLANT1
Table of Contents
Introduction................................................................................................................................2
Data Flow Diagram of Revenue Cycle......................................................................................2
Data Flow Diagram of Expenditure Cycle.................................................................................4
Analysis of Physical Internal Control Weaknesses in Giant Eggplant’s System.......................6
Description of IT Controls that should be in place in Giant Eggplant’s System.......................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

INTERNAL AUDIT OF GIANT EGGPLANT2
Introduction
A business is a setup that aims to provide a definite sales and services to a certain
range of customers in a particular area. Apart from satisfying the customers, the business
owners also maintains a revenue cycle against the expenditure cycle of the business that will
finally help to expand the business horizon and generate a profit from the workplace (Berends
et al. 2016). Hence, accounting is a major section of a business that needs to be looked upon
such that the business runs successfully in the market and stand against its competitors.
The setup of the business should focus on the internal weaknesses of the existing
systems and improve their operations such that the business flourishes in the market
(Leontjeva et al. 2016, September). Innovative technical facilities should also be induced in a
business such that the managing of accounts, payrolls, invoices and many other such things
becomes easier and helps in saving time for carrying out other major operations related to a
business.
The Giant Eggplant is a business that offers to sell fruits and vegetables to the
customers at the market. This market place is situated at Rowville in Victoria. The business is
a small one including only a few staffs and has various limitations within the system. The
data flow diagram of the revenue and expenditure cycle us discussed in the report along with
the weaknesses that exists within the system. Suggestions are also given about the IT controls
of the business that will help the business to flourish in the upcoming days.
Data Flow Diagram of Revenue Cycle
The revenue cycle in a business depicts all the operations that are related to the
buying and selling of goods from the vendors, supplying them to the customers as per their
need and gaining profit in this whole process. Keeping a track of all the accounts starting
from the purchasing of goods to the deployment of the goods to the customers and all the

INTERNAL AUDIT OF GIANT EGGPLANT3
processes in between comprises the revenue cycle in a business (Trigo, Belfo and Estébanez
2016). Cashes are collected in exchange of the services that are provided to the customers.
The business owners also ensures that the right product is sold to the customer to maintain the
goodwill of the business. According to Kabir, Saidin and Ahmi (2017), the major functions
that are a part of the revenue cycle are the entry of the sales orders, shipping of the item to the
customers at the right place and time, generation of bill with respect to the product and finally
acquirement of the cash on its basis.
In the fruit and vegetable business of Giant Eggplant in the market of Rowville, a
revenue cycle exists that are maintained in their day-to-day procedure to keep a track of the
accounts of their business. This daily operation is done manually by the various employees of
the organization because the business is a small one and is not facilitated with the automated
operations as happens in large organizations. The team of sales staffs that are majorly
involved in processing the sales to the customers during their time of check out (Raval and
Raval 2019). Apart from processing sales, they are also involved in the operations in the
business.
The store supervisor in the business is the one who is responsible for assigning the
cash register drawers to the sales staff. He maintains a log and signs it regularly while
maintaining the drawers of cash. He reports to the finance clerk about this log and hands over
the cash drawers to the finance clerk explaining him the regular details of the credits and the
cash associated with the sales. The clerk in turn keeps this record electronically in the
computer of the finance department. While keeping this track, the clerk also maintains a sales
journal for the calculating the total sales and a general ledger for the sales and cash accounts.