Financial Systems and Auditing

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|NAME OF STUDENT |Hoang Ngoc Bich | |REGISTRATION NO. |3052 | |UNIT TITLE |Unit 11: Financial Systems and Auditing | |ASSIGNMENT TITLE |Accounting and Management Control Systems | |ASSIGNMENT NO |1 of 2 | |SUBMISSION DEADLINE |Oct 26 2009 |

I, ____Hoang Ngoc Bich_______ hereby confirm that this assignment is my own work and not copied or plagiarized from any source. I have referenced the sources from which information is obtained by me for this assignment.

____________________ _____26th October 2009______

Signature Date

Table of content


II.The purpose and use of different accounting records2

A.Source data4

B.Book of Prime Entry4

C.Ledger account6

D.Financial statement8

III.Computerized accounting system9

IV.The importance and meaning of the fundamental accounting concepts10

A.Going concern concept10

B.Prudence concept10

C.Accruals concept11

D.Consistency concept11

V.Factors which may influence the nature & structure of accounting systems12

VI.Business risks and recommendations14

A.Purchase cycle15

B.Inventory cycle16

C.Sales cycle17

VII.The control sys‎tem17

VIII.Assess the risk of fraud and prevention21



Millennium Ltd is a multinational company which supplies electrical components to business customer. In daily operation, the company deals with many business transactions. A good accounting and control system is an important condition for managing operation efficiently, so that any activity contributes toward company’s strategy. It’s necessary to reviewing the accounting system as well as internal control, and find suitable improvements for weaknesses of the system.

The purpose and use of different accounting records

As a multi-nation company, Millennium involves in many business transactions which reflect what company owes and owns. It is necessary to keep track of information about these transactions for the purpose of evaluating and control company’s performance. Certainly, an accountant cannot make mental note for every details of various transactions. Therefore, a transaction recording system using accounting records should be established.

The information of each transaction is collected and recorded through several steps. In general, accounting records can be classified as shown in figure 1. As Millennium is having a manual accounting systems, the accounting records may involve both manuscripts and typed documents.

At first, when company makes a transaction, the information is confirmed in such documents called Source data. Source data includes Sales order, Purchase order, Invoice, Credit note and Debit note. In addition, there is also a document called Good received note (GNR) which is used to confirm the received inputs before paying an invoice.

After that, details such as date, amount & value of transaction, name of transactor…will be first recorded in Books of Prime entry. Those documents consist of daybooks which records information from daily transactions.

Next, data from book of prime entry is gathered to post in Ledger monthly or weekly. Ledger is a book which consists of pages recording separated accounts. The accounts can be either...
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