Evaluating Internal Controls in Accounting Systems at Bucks Phyz

The analysis highlights key areas where Bucks Phyz needs enhanced control measures: transaction testing volumes, employee fraud detection, and the use of corporate credit cards for personal expenses. It is recommended that a structured approach involving random sampling of transactions, defined procedures for daily processes, and rigorous monitoring of card usage be implemented to minimize risks. These recommendations aim to bolster Bucks Phyz's internal controls, ensuring compliance and financial integrity.

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

1ACCOUNTING INFORMATION SYSTEM
Executive Summary:
The aim of this report is to understand the concept of corporate credit cards understand its
uses and the accountant needs to decide or recommend to the CEO how he or she should decide
the distribution of corporate credit cards to the employees. The merits and demerits of the cards
are also stated clearly. Proper recommendations to the CEO are also provided in the end.

2ACCOUNTING INFORMATION SYSTEM
Table of Contents
Introduction:....................................................................................................................................4
Sales procedure overview of the Bucks Phyz:.................................................................................4
Evaluation of the internal control at implementation time by Bucks Phyz in the weeks to come:. 5
Review of the introduction of corporate credit cards and its impact:..............................................6
Detailed review of benefits and risks due to the introduction of corporate credit cards:................7
Benefits of corporate credit cards:...................................................................................................7
Lesser amount of stress for employees:.......................................................................................7
Shorter time for processing:.........................................................................................................7
Additional benefits of the corporate credit cards:........................................................................7
Tracking and control spending:...................................................................................................8
Risks associated with the corporate credit cards:............................................................................8
Personal expenses on the company card:.....................................................................................8
Bad spending habits:....................................................................................................................8
Theft of the cards:........................................................................................................................8
Evaluation of internal controls that Bucks Phyz should employ in order to reduce the impact and
incidence of risks:............................................................................................................................8
Recommendations to the CEO:.......................................................................................................9
References:....................................................................................................................................10

3ACCOUNTING INFORMATION SYSTEM
Introduction:
The aim of this study is to deal with the idea of corporate credit cards. The study helps to
make the individuals understand the basic concept of the same. It is crucial as an accountant for
Bucks Phyz to summarize the sales procedure. With regard to this, the crucial points of
information have to be clearly justified in the specific segments. Despite the CEO of Bucks Phyz
being aware of the situation the report overview attempts to put the report together for all the
readers so that they can understand the scenario positively. The present report explains about the
benefits and limitations of the mentioned corporate credit cards with proper justification even at
the same point in time.
Sales procedure overview of the Bucks Phyz:
The accounting department at the Company had witnessed several fraudulent activities
which Bucks Phyz was aware of. As a responsible individual the accountant had shown specific
amount of interest in an operating environment which was challenging and where the internal
control had faced several sorts of risks. It was not possible for the organisation to pay for the
unpleasant surprises or the leakage proceedings which took place under the current states or the
activities which were performed.
Identification of weaknesses in the internal
control of the sale process with regard to Bucks
Phyz
Possible impact of the weaknesses on the
organisation
 The invoices are collected from the
customers on the acceptance of a
 The basic customer data is directly
derived from the contracts of sales as

4ACCOUNTING INFORMATION SYSTEM
customer order
 The purchase orders from the
prospective clientele are customized by
simple email verification to Bucks
Phyz. Also the representative of sales
being so, are responsible for the
internal control facets at the company
(Romney, & Steinbart, 2012)
 There is an insufficient amount of
control over the arrears in the client
accounts which are in the trade
receivable ledgers at Bucks Phyz
also the entering into the system of
billing as a new customer profile
 There is an increased risk of incurring
bad debts which can occur with Bucks
Phyz
 There will be a high amount of risk at
the time of the payment of extra
amount which might occur due to the
bonus payment depending on the
incomplete transactions in sales (Hall,
2012).
Evaluation of the internal control at implementation time by Bucks Phyz in the weeks to
come:
The dealings of sales invoice are shown clearly in the secretarial records of Bucks Phyz
without any sort of prior agreement from any dependable official of Bucks Phyz. Thus the
auditor needs to review both the electronic as well as the review manual designed for the
safeguarding of economic information. It is also helpful for assisting in the maintenance of
accuracy and integrity of cash receipts as well as the disbursement of data. The dealings of sales
invoice need to be checked regularly. The auditor needs to check whether the cash receipts as
also the controls of disbursements are kept keeping the accounting support documentations in

5ACCOUNTING INFORMATION SYSTEM
mind. The auditor needs to go through certain steps in order to protect the corporeal as well as
the electronic cash information and the facts and figures.
It is to be kept in mind that all unauthorised transactions have to be kept in the accounting
records of Bucks Phyz which result in a coverage of economic facts which is not precise. The
imprecise coverage of financial facts can cause a loss of client goodwill. The risk of the
accountant incurring losses depending on the bad dents might arise from the sales of credit
worthiness of the customers as well as the risk of any sort of losses. In addition to this the
auditors need to advice their clients on several issues related to control which is one of the
internal control weaknesses of Bucks Phyz.
Also another effective method of effective as well as efficient internal control audit
requires the efficient audit of internal control requires the exercise of professional judgement. It
also displays the application of professional judgement of suitable risks in connection to the
economic reporting system of the client. It can however be stated that an internal control audit is
usually determined by risk based procedures. There is the need for the auditor to understand and
identify the risks on a risk based procedure. Thus it is necessary to approach a given task in such
a way that the auditor can evaluate the higher risk areas with less amount of potential. This
ultimately results in an impact which is significant (Johnson & Noguera, 2012).
Review of the introduction of corporate credit cards and its impact:
The most important aspect of corporate credit cards is that they help in the achievement
of career goals while also reaping personal benefits. In addition to this these cards are a distinct
group within the universe of the greater credit cards. In case the handling is done properly, the

6ACCOUNTING INFORMATION SYSTEM
corporate credit cards help in the simplification of the procedure of reimbursement in addition to
the reduction of administrative hassles (Simkin, Norman & Rose, 2014).
In addition to this the corporate credit cards can also support and offer economic benefits
to the employees. They also receive flexibility in spending (Williams, 2014).
Detailed review of benefits and risks due to the introduction of corporate credit cards:
In case the corporate credit cards are introduced within Bucks Phyz it will result in
several benefits. These cards assist in offering the best of travel and expense management
solutions to the organisation with suitable recognition all over the world along with solutions
which are modified suitably. The individuals using the corporate credit cards can gain more
money after each transaction of theirs is over (Bebbington, Unerman, & O'Dwyer, 2014).
Benefits of corporate credit cards:
Certain benefits of the corporate credit cards are mentioned as follows:
Lesser amount of stress for employees:
The corporate cards are beneficial for those employees who receive a meagre amount of
salary. The employees receiving the card will be grateful to the company which will be
responsible for the paperwork.
Shorter time for processing:
One of the benefits of the corporate credit cards is the shortage of the processing time. By
the utilization of the card, the employees can save data entry time due to the download of as well
as the improvement of the transactions of the credit card (DRURY, 2013).

7ACCOUNTING INFORMATION SYSTEM
Additional benefits of the corporate credit cards:
The significant benefits of the corporate credit cards are getting access to the additional
benefits of the credit cards.
Tracking and control spending:
Most significant benefits of the cards is the tracking as also controlling the spending. The
corporate credit cards of the employees provides immense amount of control to the business
owners over whatever is being spend by the employees.
Risks associated with the corporate credit cards:
Numerous risks are associated with the use of the corporate credit cards and they are
listed below.
Personal expenses on the company card:
One of the risks which is significant is that of the expenses for purely personal reasons
which is done by using the card.
Bad spending habits:
The bad card spending habits might cause the employees to face problems. This is due to
the reason that even if the card is not used for personal reasons the bill is higher with the
corporate credit card which is an issue for concern (Hassan, Nasir, & Khairudin, 2017).
Theft of the cards:
The theft of the cards which might occur at any time and any day might pose severe
issues as the cards being stolen can cause the loss of confidential financial information.

8ACCOUNTING INFORMATION SYSTEM
Evaluation of internal controls that Bucks Phyz should employ in order to reduce the
impact and incidence of risks:
The controls within Bucks Phyz need to be checked by the reduction of the transaction
testing amount. There is the existence of several internal controls over the cycle of sales at Bucks
Phyz including the sales invoices as well as the purchase order and the authorisation over the
receivables and write offs.
There needs to be a selection of random sample of transactions as also the related
purchase orders in addition to the invoices and customer statements. The auditor is responsible
for number declaration as also uncovering of staff members or fraud owners within the company.
The audits need to evaluate the daily processes of looking at the scenario whether the business
has clearly defined procedures or not (Anandarajan, Anandarajan & Srinivasan, 2012).
Recommendations to the CEO:
It is advisable that the CEO decides properly which of the employees are responsible
enough to use the cards. It should be ensured that the employees who possess cards need to use it
for official purposes only. The activities of the card users also need to be tracked very minutely.
The employees who regularly make some purchases or the other on a regular basis need to be
issued corporate credit cards and they will get additional benefits.

9ACCOUNTING INFORMATION SYSTEM
References:
Anandarajan, M., Anandarajan, A., & Srinivasan, C. A. (Eds.). (2012). Business intelligence
techniques: a perspective from accounting and finance. Springer Science & Business
Media.
Bebbington, J., Unerman, J., & O'Dwyer, B. (Eds.). (2014). Sustainability accounting and
accountability. Routledge.
DRURY, C. M. (2013). Management and cost accounting. Springer.
Hall, J. A. (2012). Accounting information systems. Cengage Learning.
Hassan, H., Nasir, M. H. M., & Khairudin, N. (2017). Accounting Information Systems. In SHS
Web of Conferences(Vol. 34). EDP Sciences.
Johnson, R. C., & Noguera, G. (2012). Accounting for intermediates: Production sharing and
trade in value added. Journal of international Economics, 86(2), 224-236.
Rainer, R. K., Cegielski, C. G., Splettstoesser-Hogeterp, I., & Sanchez-Rodriguez, C.
(2013). Introduction to information systems. John Wiley & Sons.
Romney, M. B., & Steinbart, P. J. (2012). Accounting information systems. Boston: Pearson.
Simkin, M. G., Norman, C. S., & Rose, J. M. (2014). Core concepts of accounting information
systems. John Wiley & Sons.
Williams, J. (2014). Financial accounting. McGraw-Hill Higher Education.