The company that we have chosen for this assignment is Inflex Sdn Bhd. The company is a manufacturer of closed cell rubber insulation tubing and sheeting for air-conditioning, heating, and the refrigeration industry. The company also manufactures plastic polymer products. Some of the company’s products are insulation tape, adhesive, elastomeric paint, cutting blades, and other accessories.
The company has more than 30 years of passion and experience in insulation manufacturing. With the compliance to ISO 2009 and many other convincing factors, Inflex Sdn Bhd provides their clients with excellent quality insulation products. The company’s main office is at Bangi and it has factories operated in both Kapar and Bangi.
Other than the quality of their products, the company took an ozone friendly approach in their product manufacturing, to help to care for our next generation. This is part of the corporate social responsibility done by the company.
It is the company’s management responsibility to maintain an adequate accounting system and proper internal controls of the company. An accounting system with effective internal control can help the in prevention of fraud and error, which is also the responsibility of the company’s management.
From the International Standards of Auditing, (ISA400 – Risk Assessment and Internal Control), paragraph 7, accounting system is defined as “the series of tasks and records of an entity by which transactions are processed as a means of maintaining financial records. Such system identifies, assemble, analyse, calculate, record, summarise, and report transactions and other events."
From the ISA400 also, internal control is defined as “all the policies and procedures adopted by the management of an entity to assist in achieving management’s objective of ensuring as far as practicable, the orderly and efficient conduct of its business, including adherence to management policies, the safeguarding of assets, the prevention and detection of fraud and error, the accuracy and completeness of accounting records, and the timely preparation of reliable financial information.”
The internal control system will ensure that the contents of the documents, accounting records, and other records including registers, are complete, accurate and valid. The system of internal control should have the following features: 1. Physical or custody controls
2. Accounting and recording controls
3. Personnel hiring and training policy
4. Authorisation controls
5. Management responsibilities
6. Organisational structure
7. Segregation of duties
8. Supervision on regular and continuous basis
A strong internal control on the accounting system ensures lesser chances of material misstatements of the financial statement related to fraud and error. Hence, the auditor will also be able to form an opinion based on the sufficient and appropriate audit evidence that he had obtained from the company.
PURCHASE REQUISITION TO ISSUE IN TRIPLICATE
a. Description of item
d. Payment terms
e. Expected delivery date
f. Names, address of suppliers
PURCHASE FLOW CHART
Review & Approved P.R.
PURCHASE ORDERS TO BE ISSUED IN 5 COPIES
b. Logistics & Warehousing/ Production
c. QM Department
e. Purchasing Department
Preparation Of L/C. etc
Ensure Insurance Coverge where necessary
Monitoring/ follow-up on PO
ATTEND TO COMPLAINTS ON DEFECTIVE MATERIALS RECEIVED
a. Liaising on complaints with suppliers
b. To return or replace defective goods
c. To act on any shortages on quantity
Received & Inspected by QMD
Complaints, Returned / Replacement, etc.
Goods Received Notes
References: * Boh M. Messier, Glover, Prawitt. 2007. Auditing and Assurance Services in Malaysia (Third Edition) – Mc-Graw Hill (Malaysia) Sdn. Bhd.
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