Report On Need For Internal Control & Accounting System | A to Z Hire

Added on - Feb 2020

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Internal Control and Accounting Systems
Table of Contents1.TERMS OF REFERENCE..........................................................................................................12. EXECUTIVE SUMMARY.........................................................................................................13. METHODOLOGY......................................................................................................................24. INTRODUCTION.......................................................................................................................35. ACCOUNTS DEPARTMENT....................................................................................................46. REVIEW OF THE ACCOUNTING SYSTEM...........................................................................56.1 Assessment of weaknesses....................................................................................................56.2 Recommendations..................................................................................................................77. ETHICAL EVALUATION OF ACCOUNTING SYSTEM.......................................................87.1 Accounting system against ethical principles........................................................................87.2 Actual breaches of professional ethics in the organization...................................................87.3 Recommendation...................................................................................................................98. SUSTAINABILITY EVALUATION OF THE ACCOUNTING SYSTEM............................109. INTERNAL CONTROL AND FRAUD EVALUATION........................................................119.1 Internal control.....................................................................................................................119.2 Fraud evaluation..................................................................................................................1110 Recommendation..................................................................................................................1211. Cost-benefit analysis............................................................................................................12REFERENCES..............................................................................................................................1511. APPENDIX..............................................................................................................................16
Topic: A review of accounting and ethical practices as well as an analysis of internal controlsystem on performance improvement: A case study on A to Z Vehicle Hire Company1.TERMS OF REFERENCEThere are several terms of references behind conducting such study as follows:1.1The rationale behind the preparation of present report is to shed light on the need of internalcontrol aspect and accounting system. Moreover, there are several loopholes which prevail inthe accounting practices of A to Z Hire company. In this, report will present the mannerthrough which undesirable aspects can be removed from the accounting practices of A to ZHire Company. Hence, it is one of the main reasons behind initiating such study which inturn helps in overcome the weaknesses if firm to the significant level.1.2Further, in the business organization it is the responsibility of higher management team tomake proper balance in the stakeholder’s interest. Thus, the main motive of conducting suchstudy is to analyze the extent to which accounting rules and regulations are followed by A toZ or not. Thus, such report will highlight the importance of internal control system andthereby depicts the manner in which it assists in making suitable decisions.1.3In addition to this, managers of the firm are not in position to take suitable monetarydecisions when they do not have idea about cost and associated benefits. Thus, reasonassociated with conducting such study is to analyze the cost that is related to practices of A toZ in terms of money, staff time and other resources.2. EXECUTIVE SUMMARY2.1 Current report is prepared on internal control and accounting systems. Under this relevantfirm different scenarios are discussed in detail. In case of current company varied fraudulentactivities takes place. It can be said that employee show negligence behaviour at the workplaceand due to this reason such kind of fraud takes place.2.2 It can be observed that fraud was done in the bank reconciliation statement and otheraccounting records. This face was concealed from the top managers. Hence, misunderstanding1
created and top managers make entire decisions by fully relying on the income statement,balance sheet and other accounting records. It can be observed that due to this reason firm makeextravagance and there was not sufficient cash amount in the account. It can be said that due tothis reason further cash amount decline in the business and firm entangled in the problem. This isthe one of the big issue that was faced by the firm in its business.2.3 It is very important to solve this issue on time so that performance of the firm can beimproved to great extent. Based on analysis of case some recommendations are made in thereport. As part of recommendation it is clearly stated that firm must appoint only relevantcandidate as chartered accountant at the workplace. By doing so it can be ensured that in propermanner accounting is done at the workplace.2.4 Apart from this, there is need to improve internal control system at the workplace. This isvery important because if there will be strong internal control system then in that case no onewill be able to do fraud related activities on time. Hence, it can be said that there is significantimportance of internal control system for the managers.3. METHODOLOGY3.1 For conducting study in an effectual way, appropriate selection of tools and techniques arerequired. Moreover, in research effectiveness of outcome is highly affected from the tools thatare undertaken for such purpose. Hence, methodology clearly entails the techniques whichresearcher undertakes during the whole investigation. Thus, it acts as pathway which in turnprovides direction to the researcher in whole study.3.2 Further, methodology selection is based on the type of issue which is going to beinvestigated. In the present study, to evaluate the accounting and internal control system of A toZ following methodology has been undertaken by the researcher:3.3Data collection: With the motive to make evaluation of accounting and internal controlaspect of A to Z secondary data sources have been used. Hence, to meet the research objectivesignificantly several books, journals and other scholarly articles related to the accounting systemhave been used for extracting suitable information. Thus, books and articles which are related toaccounting and internal control system or practices have been evaluated for the preparation of2
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