Audit Test Report: Analysis of Jertsy Ltd's Financial Controls

This report presents an audit test case study focused on Jertsy Ltd, a fashion clothing business operating in Australia. The assignment analyzes the company's internal and external systems, highlighting weaknesses in financial controls and management. The report discusses the importance of strategic, organizational, operational, and quality controls during business expansion. It emphasizes the need for effective financial management, including proper record-keeping, strategic planning, and the hiring of qualified staff to manage growth. The report also addresses the risks associated with expansion and the importance of attracting stakeholders and maintaining client satisfaction. Recommendations include implementing robust audit procedures, ensuring accurate financial statements, and adopting tools and techniques to enhance product quality and overall business performance. The goal is to improve financial performance and ensure the long-term sustainability of Jertsy Ltd.

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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
The aim of the assignment actually deals with the case study actually dealing with the
improvement in the internal and external system of the business which is Jertsy ltd in this
case. The weakness in the system has been depicted in the business and accordingly further
improvement which is needed to be acquired by the business are been conducted in the given
study. The business actually deals with the wide range of the fashions clothes in Australian
state capitals. The store managers in this case actually plays the significant role in the
business as it operates the degree of autonomy with the regards to the types and the quantities
of clothes, which are actually bought or rather, sold in the business.
Discussion
The main problem is that the transaction, which are recorded by the accounts of the
business, are not properly maintained or rather managed by the top level management of the
business. The monthly turnover, which is actually generated by the business, are reported to
the head office and there the business further keeps all the records into consideration. All the
monthly returns are actually piled up together and further consolidated by the accountants
which actually manages the monthly management reports (Anil, Ibon and TG 2017). The
weakness is not the success the business is accomplishing the recent years but they are quite
worried about the control in the management system due to the expansion in the business of
the business.
There are certain steps which is needed to be adopted by the management of the
business to enhance the productivity at the time of expansion in the business operation. The
steps are significantly shown below:

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 Strategic control – It is important for the business to have strategic control over the
business by the formulating or rather improvising the significant strategy of the
business. The strategy control actually focuses on the environmental strategic
business alignment along with competition in the existing market. In case of the
business named Jertsy ltd it is important for the management to build effective
strategy in order to manage the financial operation as with only a single accountant is
not possible to take control over the financial factors which are associated with the
business. If the management strategy of the business is effective then the business will
be able to take control over such kind of business expansion and will further be able
to work on the glitches in the system at the same time.
 Organization Control – In case of the organization control it is actually important for
the management to restructure the major changes within the organization due to the
expansion in the business. This also includes hiring the potential staffs in the business
which will rather take care of the stores along with the major impact on the business
perspective. It is needed for the organization to select and implement the design
within the organizational process and further it is actually needed to concentrate on
the overall outcome which is generated by the business at the end of the year. The top
level management of the organization actually needs to evaluate the potential aspects
of the business and further notice the major fluctuation which are financially
occurring within the business for a long period of time. The management must invent
some of the significant techniques which will further enhance the production along
with the profitability of the business (Shoup 2017).
 Operational control – The operational control involves the operational process within
the system of the business with both the business and basically operational activity
which is actually associated with the business (Senft, Gallegos and Davis 2016). In

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this case it is actually needed by the business to set the standard of the business in
order to further enhance the productivity and control in the business. The actual
performance of the business of the business must be measured by the business and
further the performance in that must be compared based on such of expansion in the
business. The financial or rather the operational controls actually involves the
effectiveness control in the business of the business. The policies, procedures, rules
and regulations of the business helps to manage the overall operation of the control
functions in the business (Pilbeam 2018). The business must evaluate the performance
ratio of the business and further interpretation of the same in that case is significantly
important for the business.
 Quality Control – The quality control of the business is significantly important for the
business and it includes some of the performance metric parameters which is actually
needed .to be adopted by the top level management of the business. The performance
parameters in this case are the performance, features, reliability, durability, services
ability and perceived quality. It is the accountability for the top level management of
the organization to balance the whole situation in that case by analyzing the entire
situation. The quality improvement tool in this case are the statistical tool along with
the total quality management, which is also involved in this case. Along with that, the
store managers of the business must set the benchmark regarding the quality of the
product (Cameran, Prencipe and Trombetta 2016). After that, it is needed to send the
report to the top-level management of the business. Effectiveness in the quality
management will further help the business to enhance the overall production in such
business expansion of the business.
The management needs to adopt some of the significant business strategies in order to
have control within the system of the business (Härdle, Chen and Overbeck 2017). The

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business must take new step towards the expansion strategy of the business. Apart from the
internal and external business, aspects of the business must be taken into consideration by the
top level management of the business. If the accounting or rather the financial department of
the business is effective then the business will be able to generate enough revenue for the
business along with that by following the rules and regulations in the business will help the
business of Jertsy ltd to stay away from the material misrepresentation of the business (Krarti
2016).
The management system of the business must have the end to end control in the business
and it is only possible if the management of the business hires the potential staffs in the
business. By providing the necessary training, the business will be able to generate huge
business by selling the product in the business. The main profit of the business comes from
by selling the products in the stores of the business. During expansion, the management must
maintain the existing strategy in the business along with that it is actually needed by the
management to improvise some of the new strategy to enhance the overall performance along
with the financial performance of the business (Fisher 2018). The growth is actually increase
the task along with couple of extra objectives within the business. There are also some of the
risks which are involved in case of expansion of the business.
This will further help the business of the business to earn revenue if the top level
management of the business is concerned about the potential aspects of the business along
with the overall production of the business (Gitman, Juchau and Flanagan 2015). The
objective or the goal, which is set by the firm, must be based on the parameters which is
realistic in nature. The significant decisions in that case are taken into consideration by the
top level management of the business. It is further needed to enhance the quality of producing
the products in the business by the help of adopting the new tools and techniques which are
important for the business. The significant changes, which are needed to be adopted by the

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top level management of the business, are based on the present fluctuation which the business
is really facing at this moment. Extensive management control in that case is needed to be
adopted by the top level management of the business in order to bring efficiency whether it
comes to make perfection in the business aspects of the business (Salmona, Kaczynski and
Smith 2015).
The effectiveness in the management system of the business will further attract the
potential shareholders in the market. If the shareholders of the business are interested, then
the share price of the business will automatically increase and then it will quite be beneficial
for the business to take a leap to the next level. The directors of the business must appoint
auditors in order to perform the audit work in order to verify that all the transaction of the
business are accurate and effective (Gelsomino et al. 2016). It is actually needed in order to
ensure that the financial statement of the business is free from all sorts of material
misstatement. It actually falls under the accountability of the business to understand the facts,
which are associated in that case and further, enhance the sustainability management of the
business based on the long run objective of the firm.
It is actually needed by the business to attract the potential stakeholders of the business
and it is only possible if the stakeholders of the business are well aware about the current
progress of the business in terms of the current market position (Arcand, Berkes and Panizza
2015). For the purpose of expansion of the new store the assist from the stakeholders of the
business in that aces is significantly important for the business based on the current situation
of the business. The extensive plan is required to be prepared by the top level management of
the business in order to make the expansion plan of the new store a great success.
The procedures, which must be adopted by the business, is simply based on the
significant strategies. In order to bring consistency in the business performance apart from the

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expansion of the strategy it is quite needed to have end-to-end control in the operational and
the management activities of the business (Ehrhardt and Brigham 2016). The changes in the
management system of the business will definitely effect the business prospect based on the
long-term activities of the business. There are actually certain benefits for having the
effective control within the business, which is actually related to the effect in the business
prospects of the business based on the long run activities, and in case of sudden changes, the
management must stay calm and remain focused in the activities of the firm.
Each and every business actually focuses on the growth of the business where it is
actually important for the business to take care of the facts which is included in the business
perspective of the business. The managers and the directors of the business along with the
store manager of the business must be focused on the main aspects of the business which
actually falls under the main part to handle the perspective of the business.
The senior management must hire the potential staffs at the time of expansion of the
business which will automatically enhance the business prospects based on the long run
objective of the firm. The decision must be taken based on evaluating the facts which is
related the satisfaction of the clients. The clients of the business is the start and the end of the
business and keeping them satisfied is always the main objective of the business. Maintaining
the business requires the control over the clients will further enhance the revenue in the
business. This will help the business to achieve huge growth based on the long-term activities
of the business and sudden enhancements will take the business to the next level.
At the time of preparation of the budget, the extensive control in the business will thereby
help the management of the business. It will help the business to bring accuracy in the system
along with that the variance in the budget of the business will be less in comparison to the
other aspects of the business. The existing system of the business is further needed by the

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business to improve the overall business condition of the business. Along with that the
marketing strategy of the business will automatically help the business of the business in
terms of the revenue in the business. This is actually a potential for the business to stay ahead
compared to the competitors of the business and further take the potential aspects of the
business.
Conclusion
From the above discussion, it can be said that the business of the Jertsy ltd will grow
if the higher-level management system of the business actually follows the significant aspects
of the business. The expansion will only be successful if the business adopts the significant
strategies in the business which is depicted in the above study. The quality control and the
other extensive business control will help the business of the business to prosper accordingly.
The weakness in the system has been analyzed accordingly and further the improvement,
which is needed to be adopted by the senior level management of the business, must be
adopted by the business based on the short and the long term activities of the business.

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References
Anil, M., Ibon, G. and TG, R.D. eds., 2017. Climate finance: theory and practice (Vol. 2).
World Scientific.
Arcand, J.L., Berkes, E. and Panizza, U., 2015. Too much finance?. Journal of Economic
Growth, 20(2), pp.105-148.
Cameran, M., Prencipe, A. and Trombetta, M., 2016. Mandatory audit firm rotation and audit
quality. European accounting review, 25(1), pp.35-58.
Ehrhardt, M.C. and Brigham, E.F., 2016. Corporate finance: A focused approach. Cengage
learning.
Fisher, R.C., 2018. State and local public finance. Routledge.
Gelsomino, L.M., Mangiaracina, R., Perego, A. and Tumino, A., 2016. Supply chain finance:
a literature review. International Journal of Physical Distribution & Logistics Management,
46(4), pp.348-366.
Gitman, L.J., Juchau, R. and Flanagan, J., 2015. Principles of managerial finance. Pearson
Higher Education AU.
Härdle, W.K., Chen, C.Y.H. and Overbeck, L. eds., 2017. Applied quantitative finance (Vol.
2). Springer.
Krarti, M., 2016. Energy audit of building systems: an engineering approach. CRC press.

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Pilbeam, K., 2018. Finance & financial markets. Macmillan International Higher Education.
Salmona, M., Kaczynski, D. and Smith, T., 2015. Qualitative theory in finance: Theory into
practice. Australian Journal of Management, 40(3), pp.403-413.
Senft, S., Gallegos, F. and Davis, A., 2016. Information technology control and audit.
Auerbach publications.
Shoup, C., 2017. Public finance. Routledge.
Soros, G., 2015. The alchemy of finance. John Wiley & Sons.
Yang, W., 2016, October. Survey on Behavioral Finance Theory. In 2016 International
Conference on Management Science and Innovative Education. Atlantis Press.