Accounting Case Study Analysis: Financial Controls and Governance

This document presents a comprehensive analysis of multiple accounting case studies. It delves into various aspects of financial management and corporate governance, including internal controls, delegation of authority, and financial reporting. Case studies explore issues such as weaknesses in current processes, risks in sales functions, and the role of board members in effective governance. The solutions provided cover topics like the Corporations Act, industry-specific acts, responsibilities of the board, and the importance of delegation. The assignment also includes multiple-choice questions and written answers, offering a detailed examination of accounting principles and practices. The case studies cover different scenarios, including auditing internal controls, analyzing financial statements, and assessing the effectiveness of management actions. Specific findings and recommendations are presented to improve the overall efficiency of the system and generate more sales. The solutions aim to provide a detailed understanding of accounting concepts and practical application in real-world scenarios.

Accounting
Assignment

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Table of Contents
CASE STUDY 1..............................................................................................................................................2
CASE STUDY 2.........................................................................................................................................3
CASE STUDY 3.........................................................................................................................................4
Case Study 4................................................................................................................................................5
Assessment 1...............................................................................................................................................6
Written Questions........................................................................................................................................7
References.................................................................................................................................................22
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CASE STUDY 1
Answer to case Study 1 (a)
Answer to case Study 1 (b)
The weaknesses that area unit apparent within the current processes area unit as follow:
a) There isn't any maker and checker construct within the processes.
b) As all the workers area unit making ready a detail of batch total and entered a similar
within the laptop to come up with deposit slip while not the main points being check by the other
person, thus the error is preserved within the details itself and wrong deposit slip can get
generated.
c) As the workplace manager is given the authority to approve the debt write-off that is
completely wrong as these ought to be initial approved by the decision maker (Belton, 2017).
Answer to case Study 1 (c)
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Managing Director
Clerk 1- He is
responsible for the
sale of training
information
Clerk 2- He is responsible
for registration for
training resources
Clerk 3- He is responsible
for donations received
from benefactors
Office Manager-He is responsible to prepare
regular accounting information from the
integrated accounting system

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All staff United Nations agency handle money ought to take a training for all the rules to be
coplied with before any authority to deal with the safe.
When a payment is received , the employee or the person handling it should have recorded
immediately as a credit of the amount so received and pin it with a unique number as would be
recognised.
Every single day a ban econciliation statement should be prepared in order to check the
differences in the passbook and the cash book and thereafter record those and account them
herewith as necessary (Boghossian, 2017).
Two persons ought to open the mail after they expect money or checks within the mail.
CASE STUDY 2
Answer to case Study 2 (a)
As per the management of Margaret River Wines the number of sales administration staff in
the Western Australia branch is more than the required, so the management has reduce the
number of Sale administration staff with an objective to achieve the target of maintaining
profit per employee. The attitude of the Management of Margaret River Wines was too rough
as they can’t increase the sales so they reduce the cost of the employees to maintain the same
profit (Charles H, et al., 2015).
Answer to case Study 2 (b)
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The risks that the internal auditors needs to take into account in the internal audit of the
Western Australia Sales functions are:
a) Decrease in sales as the staff of sales deparment is being terminated.
b) The appointment of unexperienced staff in sales department which may lead to
inefficiency in sales report presentation and strategy.
c) There is no maker/ checker system in the sale department as the staff in the sales
department is being fired (Coate & Mitschow, 2017).
CASE STUDY 3
Answer to case Study 3 (a)
a) The cash register rolls are reconciled by the sales clerk which should be done by the
account staff.
b) The cheque should be signed by the single authority and which should be hirarchy
maintained.
Answer to case Study 3 (b)
Very Less involvement of higher manager as Branch Manager/ Regional Manager can use
the fund without intimate the Divisional Manager which may lead to fraud.
Answer to case Study 3 (c)
Role of divisional manager should be increased.
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Cash register and BRS should be prepared by the specialist and the time frequency for
reporting period of BRS should be less.
In respect to expenditure report, Divisional manager should involve more that can lead to control
over cost and ineffenciency (Covaleski, et al., 2003).
Case Study 4
Exceutive Summary
The main aim is to audit the internal controls of Red Earth Limited and find the necessary risks
that are there in the system which would help in increasing the overall effectiveness of the
system and generate more sales and also lead to better actiosn from the management.
Objective and Scope
The main objective is to perform an audit of the internal control system of the company and find
the best results possible that would help in increasing the overall efficiency of the system of the
company. The scope includes audit of the financial statements, audit of the internal controls,
audit of the activities of the management, analysis of the key findings and then giving out the
most appropriate audit opinion (Grundy, et al., 2017).
Specific Findings and Recommendations
1. The financial statements are not updated and many key information have not been
included and this presents a wrong picture of the company like the 3 months BAS budget
has not been completed, so that should be finalised. The payment of interest earned has
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still not been credited in the books. There was a difference in the debit credit adjustment
so that should also be taken care of (Abdullah & Said, 2017).
2. No proper delegation of duty is there and that is a major issue in the internal control of
the company and that should be regulated like the transactions of the clerk should be
restricted to $1000 per transaction. The warehouse person should not be given the
responsibility of keeping the inventory records and there should be another person for
that (Kaufmann, 2017).
3. It was also seen that the annual report was still not completed and the percentage of
deadline missed rosed from 10% to 50% so that should be taken care of and all the
regulatory requirements should be completed on time (Coate & Mitschow, 2017).
b.
Event Number Non-Compliance Changes Required Timeline
1
Non-completion of the BAS
reports for last three
months
The BAS reports
needs to completed on
monthly basis
Before the completion of
the current month all the
prior period BAS reports
needs to be completed
2
Non-Filling of the annual
report of ASIC
The annual report of
ASIC need to be filled
within the regulatory
due dates
The annual report needs
to be completed and filed
and all the penalty that is
levied needs to be paid
3
The registered office of the
company was changed but
no forms were lodged
The accountant needs
to file the necessary
forms updating the
changs adress
The accountant should
complete all the
formalties within a week
Assessment 1
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MCQ Answer
1. e)
2. e)
3. c)
4. e)
5. d)
6. a)
7. e)
8. a)
9. e)
10. b)
11. e)
12. e)
13. c)
14. d)
15. b)
16. c)
Written Questions
1. Corporations Act
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The Corporations Act imposes specific certain rules and procedures which the
administrators and the people of the corporations should comply with. These duties are:
It is the duty of the individuals to perform their work and duty with utmost care and
responsibility that one should have;
It is the duty to act in a true and fair manner which doesnot compromise the interest of an
individual of any company or an organisation.
Decisions created by administrators should be created for correct functions and within the
best interests of the corporate as an entire. once the corporate is in associate degree
‘insolvency context’, this can need that the interests of the company’s creditors be taken
into consideration (Vieira, et al., 2017).
Industry Specific Act
This is another Act which governs the legislative framework of corporate governance.It
helps in setting of frameworks for the companies to follow and take effective decisions
with respect to that (Webster, 2017).
2. ROLES OF BOARD Members For Effective Governance
Legislations in making
The role defines an appropriate execution of all the rules and regulations which has to be
complied with in the best interest. The policies are different for all the levels of
management as well as the employees. The role of the board is to develop good policies
that is rules and acts which should be followed and be executed by the levels of
management.
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Making of a decision process
Decision taking involves creating alternatives relating to the organization's vision, mission,
and techniques. Boards produce alternatives relating to issues that square measure
strategic and vital. While taking decisions, the higher level of management will even give the
responsibility of certain parts which are not related to governance to others (Iggers, 2018).
Inspection
This role is an important one which is played by the anagement as they think that managing an
organisation is in their hands. Some of the forcefully enter into the decisions of the management.
The committees of the board play an important role in the management of the organisation by
deeply looking into the functions of the committees and keeping the expectations clear enough.
BOARD RESPONSIBILITIES
The board have a variety of responsibilities which they need to perform and comply with in order
for an effective management inturn for an effective governance. From supervision to maintaining
and complying with the ethical standards and monitoring compliances are all the responsibilities
of the board which they should perform.
The boards generally perform all the supervison in the financial sectors. The controls of
management which has economic indicators are measured by the board relating to cash
management and the finds which are properly invested or not and all things related to handling of
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the budget process for effective internal control resulting in good governance. The assets of the
company should be protected. The inspection of the house as a quality process which results in
reduction of risk improving the morale as well as the standards is well established by the board.
The board prescribes the proper behaviour which should be maintained which is tolerable for the
organisation (Borit & Olsen, 2012).
After these listed responsibilities it is of common importance that it should decide whether the
books of the accounts should be maintained and reviewed on a daily basis.
3. One need to delegate authority to whole entirely totally different persons therefore
nobody has a time or an intention to deceive anyone.
The business has approx. of individuals of around minimum of five and maximum of
fifteen persons it's not appropriate or better that one should be given all the authoritical
responsibilities to take all the decisions. It should be divided among all so that all of them
have a chance to take decisions.
The Different type of duties which ought to be performed are:
Not a single person should be liable for the fulfilment of the duties prescribed.
Product which is to be ordered
The receipt of the product
The payment is to be completed and authorised
Retaining the accounting records
To reconcile the books of accounts
Comply with directions
One need to turn out procedures that embody directions :
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Placing of an order for the wanted product or a service
Authorisation of the negotiable instrument lie cheques
The miscellaneous expenses to be passed
To take a check on the cash in and out
Checking the accounting records and thereby passing it if appropriate
The responsibility of one is that the person to whom the authority is delegated to
authorise the books of accounts and the recordsand review the orders of the products
from the suppliers itself.
4. A financial (expenditure) Delegation is that the authority to approve expenditure or enter
into money commitments on behalf of The University of state capital. All delegations
apply to positions and to not people in accordance to the Principles - Delegations of
Authority.
The advantages of Delegation
The word management means getting work done by others in a very coordinated manner
and efficiently handling the day to day chores of managing a company where each and
every person gets some responsibility. If someone is given an appropriate delegation of
authority to do any particular task or a department responsibility the success will only
depend upon how efficiently it has ben delegated and how effectively it will work and
produce the desired results for the company as a whole.
The main functions of a management is planning, organising, controlling, directing,
coordinating where the delegation that is assigning a work is considered to be a superior
approach in terms of these. .
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