Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

Simply Steam, Co.

No description
by

Tiu Jia Hui

on 27 November 2013

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of Simply Steam, Co.

Simply Steam, Co.
Evaluation of Internal Control Environment
Tiu Jia Hui
Student no.: 201390380
Company Background
Simply Steam provides both a domestic and industrial carpet steam-cleaning service and sells a small amount of inventory.
Management of the company
Doug Dosio
Phil
Mr. Day (Office manager)
Salespeople
Selling domestic and industrial jobs based on standard prices
May sometimes negotiate special cut rates, subject to approval by Mr. Day or Doug
Large industrial jobs are typically booked in advance of the actual work
Job commitments obtained are submitted to Mr. Day
Sign to indicate approval then returned to salespeople
Forward job commitment to data input clerk for processing
extending the number of jobs by the standard price or specially negotiated situations
Computer process each commitment by
Sales, Accounts receivables and commitment files are updated and invoices are produced
Exception report of special prices
is produced to ensure that specially negotiated commitments to jobs were processed correctly
This sales system is pieced by Mr. Day
The user manual for the system is not completed yet
Doug discovers that Mr. Day sometimes alters the system to make the process more efficient
Doug wants Mr. day to re-evaluate the process at least once every couple of months
Accounting department
Consists of seven part-time clerk
None of the clerks has an accounting degree
All except one are college students majoring in accounting
Mr. Day trains all new accounting staff
Staff generally leave as soon as they graduate

Employee Turnover
It happens all the time
Open door policy
Monthly office meeting
Phil is in-charge of employee turnover
Job responsibilities
"Work should be done by the people who are available when it has to be done"
results in
Overlapping of duties
Assigning of daily duties
Overview of each day's accounting record
Mr. Day's job responsibilities
Processing Accounts receivables
Does not prelist cash receipts before recording
Collect all the checks at the end of the day and record them all at once
They always find ways to resolve collection processing problem that arise
Receivables are pledged as security for bank loan
Bank has been lending money for the past year and a half
Loan amount is relatively small
The contract allows the bank to access company's account if collection loan seems doubtful
A
c
c
o
u
n
t
i
n
g
S
y
s
t
e
m
Looking into using a new accounting software
Make bookkeeping process easier
Package includes a budgeting system to control cost
In the past, company expenses were monitored on intuitive basis
Business is getting bigger hence the company want to have a budgeting system
Accounting records
Physical assets
Office door and windows are heavily bolted after office hours
Only Doug, Phil and Mr. Day have keys to open the office
None of the file cabinets were locked up at night
No computers bolted down to the desk as well
Vans are kept in a fenced-in lot behind the office
Each driver have a key to the gate lock
Necessary because most commercial cleaning are done after working hours
Lock is change once in awhile to avoid mischief
Why Simply steam, co. wants to be audited
They want to pursue other business endeavors in future
Want opinion on the company's financial statement and make it professional
Have Simply steam, co. been audited before?
Audit
No, but they used to file for tax return
Company could not afford the fees of audit in the past
Issues of concern
Receivable balances are collected within 2-3 weeks
To date, the company has no record of fraud
Board of Directors
Doug
Phil
Their wives
They have at least one regular scheduled meeting each year.
There are no written goals or objectives for the company
Cover a larger sales territory
Increasing advertising
Investing in more help and additional equipment
Taking a well-deserved vacation in Hawaii
Evaluation of Simply Steam, Co.
1 2 3 4 5 6 7
Greatly
Weakens
Control
Neither
Weakens nor
Strengthens
Greatly
Strengthens
Control
Integrity &
Ethical Values
4
Commitment to Competence
1
Board of Directors
or Audit Committee
participation
2
Management's Philosophy
and Operating style
3
Organization
Structure
1
Assignment of Authority and Responsibility
1
Human Resource
Policies
and Procedures
2
Overall evaluation of the Control Environment
1 2 3 4 5 6 7 8 9 10
Very Weak Control
Environment
Weak Control
Environment
Intermediate
Control
Environment
Strong
Control
Environment
Very strong
Control
Environment
Reasons:
Management does not specify the competence level needed for particular skills
No evidence indicating that employees appear to have the requisite knowledge and skills
Board of Directors not independent of management
Organization's lines of authority and responsibilities are not clearly defined
No clear assignment of responsibility and delegation of authority for goals, objective and operating functions
Employees do not have the background and experience necessary for job duties
Turnover rate is high
Full transcript