aat. cookridge ltd

Topics: Fraud, Internal control, Credit card Pages: 11 (4829 words) Published: October 30, 2014

An analysis of the accounting operations and function of Inkwell Limited with recommendations for improvement of the weaknesses of the accounting system. Submitted by: Kurt Adeline
AAT student membership number: 10371932
Date:
This Report is submitted for assessment of the AAT Learning and Assessment Area “Internal Control and Accounting System”. Word count: 4397
Content Page
Pages
1) Terms of reference………………………………………………………… 2 2) Executive summery………………………………………………………… 3 3) Methodology…………………………………………………………………… 4 4) Background to Inkwell Ltd………………………… 5 5)
6) The accounting function of Inkwell Ltd
Review of the accounting system……………………
Record keeping system………………………………
Internal system of control……………………………… Fraud………………………………………………………………… Working methods and practices…………………………… Training…………………………………………………………………… 6 7) Weaknesses identified…………………………………………………………… 8) Recommendation…………………………………………………………………… 9) Cost benefit analysis………………………………………………………… 10) Appendices………………………………………………………………………… 11) Mapping……………………………………………………………………………… 1 Terms of Reference This Report has been prepared to cover the assessment requirement of AAT Learning and Assessment Area “Internal Control and Accounting System” The objective of the Report are to:

Analyze the manual accounting system of Inkwell Limited in order to identify areas of weakness in its internal control. Make recommendations for improving the accounting system of Inkwell limited. Executive Summery

This report evaluate the different accounting function of Inkwell Limited identifies weaknesses that are observed in the functions, making recommendation for the improvement and guesstimating the cost benefit of the recommendations. The aspects of the analysis are:

Record keeping system
Internal system of control
Working methods and practices
Training
The key weakness identified in Inkwell Limited was:
Standard and policies in place for training staffs
The working practices, involving calculations and record keeping systems How the cash is handed and management liquidity
The security of financial documents, cash, cheques and of the office The recommendations made are mainly:
The integration of computer system.
Implement Job rotation and make the employees multi-skilled Improving liquidity management by collecting and making payments in time. Communication should be improved.
Introduction of new policy and regulation.
The cost benefit analyses made are mainly:
The cost of training staffs
The cost of introducing new accounting program.
The benefit which will be gain from a risk assessment including the time to be done. The cost of Hiring New staffs
To summarize, if the recommendation is put into consideration, even if it comes at accost, it will benefit the business to be more professional, reliable, less time consuming and being cost effective. 3 Methodology

3.1 To start the project the AAT case study was studied to clearly understand its accounting operations, procedures and the personnel with different responsibilities. 3.2 A consultation of the accounting department team was done by interviewing, observing the employees to better know and understand how the work is done. 3.3 A SWOT analysis was done, discovering any weaknesses and suggesting solution to improve on the weaknesses. (See Appendix on page 22-24) Reference

3.4 Written documents on the AAT website and Osborne book (Internal control and Accounting System, see appendix on page for more details) were used for sources of information to aid in writing this report. 3.5 Acknowledgement and thanks:

Mr. Jayanta Lokuge. Lecturer, School of Business Studies.
The different employees who answered the questionnaires.
Organization background
4.1 Inkwell is a Public limited company and was established in 2003, seven years ago by two of its three controlling shareholders, Paul Farnon and Victoria Dawson. Two years ago Anil Gupta bought into the company and joined the board as...
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