This report has been written on behalf of the Finance
Director of Inkwell Limited. Its purpose is to investigate and make suitable recommendations for improvement to the company’s internal control and accounting systems and assign such improvements to a cost benefit analysis.
A complete examination into the operations of the accounting function was carried out and each staff member interviewed regarding their job role.
Preliminary findings show the accounts function is
struggling to operate effectively due to levels of understaffing and a poorly managed and untrained workforce. This coupled with the non compliance and lack of internal control procedures prevents an anti fraud culture and is threatening working capital levels preventing the continued expansion of IWL.
Several areas have been identified as the main cause of this and include the part time employment of two key workers within the Sales and Purchase Ledger Department, failure to support colleagues’ workloads during periods of absence, poor credit control procedures, a relaxed attitude from management regarding adherence to company policies and a fragmented accounting package currently in operation to support the business.
It is recommended that the two remaining part time employees within the accounts function be employed on a full time basis bringing their hours in line with that of the rest of the department in order to aid and support the key operations of the function. Should the extension not suit those currently employed in the role, two additional employees should be employed to support the department on a part time bases to make up the difference in hours. It has been identified that the
costs associated with the employment of additional members include a one of cost of £9711 with an ongoing annual cost of £8486 per employee.
Benefits indentified with this investment include a
reduction in overtime premium paid to workers to support the department...