Student

Problem Statement

There is a control risk problem in Simply Steam’s Accounting System and policies & procedures due to non-professional accounting activities.

Issues

1) All clerks are part time and not accounting skilled personnel who look after the full accounting system.

2) Not using any accounting software

3) No proper segregation of duties

4) No written policies and procedures for obtaining company’s goal and objectives

5) Easy access for unauthorised employee to company’s accounting system due to insufficient security system.

Alternatives

1. Need professional or experienced accountant for the ….. of the company

2. Company should use professional accounting software like QuickBook or Simply accounting

3. Duties and responsibilities must be segregated

4. All important policies and procedures of the company must be readily available in written.

5. To keep company’s accounting information system secure, need proper security system, as if, no unauthorised person can access easily

Analysis of Alternatives

Analysis for issue 1:

Simply Steam should maintain control environment like careful hiring of personnel, control activities like signing of cheques and authorisation of wages. They need to regular evaluation of accounts receivable and accounts payable to control risk assessment.

Analysis for issue 2:

Simply steam should use accounting software for their accounting accuracy, automatic updating in accounts system, recording all the transactions, making payments and cash disbursements, keeping automatic updating of the general ledger, making automatic adjustment of all records and automatic calculation of payroll.

Analysis for issue 3:

Segregation of duties for a company is a must. For example, if the cashier receive cash and is responsible for data entry of cash receipts and sales, it is possible for the cashier to take the cash received from a customer and adjust the customer’s account by failing to...