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For Each Procedure, explanin the weakness in internal control and identify the control principle that is violated.

  • All over the counter receipts are registered by three clerks who share a cash register with a single cash drawer – All the three clerks are sharing a cash register which indicates that the company has not made any clear demarcation of the responsibilities and the roles of each employee. All the three clerks does not have the specific responsibility due to which the there may be the possibility of having the theft of cash. Secondly, the accountant of the company shall be different from the cashier in all manner otherwise there are high chances of having the mismanagement and embezzlement of funds.

Control Principle Violations and Suggested Changes

Various control principles have been violated. These are:

  1. Proper segregation of duties have not been made due to which the accountant and the cashier are the same person.
  2. No system has been framed by the company where the independent verification of the clerks can be done. In the current scenario they are being self assessed.
  3. Lastly the company has violated the principle of the documentation procedures as all the three clerks share the cash register and the documentation of the same is very weak. 
  • To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked tin in the printing room, until it is deposited in the bank–

The basis and foremost weakness is that the cash is not protected from theft. Second weakness is that the counting of cash is not being done on an independent basis. No single clerk is authorized and accountable for the counting of cash receipts and the deposition of the same with the banks.  

Following principle has been violated:

  1. Principle of having physical control over the cash has been violated as it is being stored in the printing room which is unsafe.
  2. Principle of having the mechanical controls over the cash has been violated. It is because the cash is being kept in an open space.
  3. Principle of having electronic controls have been violated as no device has been kept which can track the theft of cash in case the robbery occurs. 
  • At the end of each day, the total receipts are counted by the cashier on duty and reconciled to cash register tape total

In this scenario also, the company has not made any clear demarcation of the responsibilities and the roles of each employee. Therefore, cash is not independently counted by any of the clerk and instead it is the joint effort.

One of the major principles that have been violated is the system of having the independent verification of cash. Due to this the cash is being handled so leniently that any of the clerk can count the cash and make entries in the cash register. 

- The accountant deposits the cash received in the bank and then record the day receipts.

Again the weakness that has come into place is the segregation of duties as the accountant is handling cash on daily basis and he records the receipts after depositing the cash. In this case, there may be the chances that the accountant may get himself involved in malpractices relating to cash management and fund management of the company.

The principle that has been violated is the proper and due segregation of duties as the accountant himself is counting the cash, deposits the same into bank and then make the accounting entries in the books of account. Therefore, principle that has been violated is the independent verification of cash and proper segregation of duties. 

S. No.

Control Procedures Used

Suggested change in procedure

1

All over the counter receipts are registered by three clerks who share a cash register with a single cash drawer

Clear roles and responsibilities of each of the clerk working in an organization shall be laid down.

Accountant shall be different from the clerk who is handling the cash.

2

To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked tin in the printing room, until it is deposited in the bank.

The procedure shall be made where there is the system of having the independent verification cash.

The cash shall be kept in the locker or safe which is guarded by the physical, mechanical and electronic control.

Accountant shall be different from the clerk who is handling the cash.   

3

At the end of each day, the total receipts are counted by the cashier on duty and reconciled to cash register tape total

Clear roles and responsibilities of each of the clerk working in an organization shall be laid down.

Accountant shall be different from the clerk who is handling the cash.

4

The accountant deposits the cash received in the bank and then record the day receipts.

Clear roles and responsibilities of each of the clerk working in an organization shall be laid down.

Accountant shall be different from the clerk who is handling the cash.

The procedure shall be made where there is the system of having the independent verification cash.

Response to Kate

Accounting is the process where the transactions of the company are recorded, classified and summarized at one place so that the users of the same can analyze and interpret the results there from.  Under the tree of accounting, there are two branches of accounting which has become the big question for you Kate. These are management accounting and financial accounting. Both of the branches have their own requirements and usage depending upon the needs and desires of the users of the report of the two different branches of accounting.

At one instance both the branches of accounting looks to be similar as both are intended for use of the internal users as well of the external users and both takes into account the transaction and the events of the business and enterprise. But there are certain differences which have been tabled below:

S. No.

Particulars

Financial Accounting

Management Accounting

1

Governing Law

The financial accounting is governed by corporations act, 2001, accounting standards, GAAP, etc

The management accounting is not governed by any law rather they are being done because of the requirements of the managers of the company.

2

Basic Premise

The Main function of this branch of accounting is that the transactions of the company are recorded and published at one place for its users.

The main function of this branch of accounting is that it helps the managers in making decision and provides information for the management of the company.

3

Users

The financial accounting is majorly for the external users of the company like shareholders, banks, financial institutions and other stakeholders.

The management accounting is majorly for the internal users of the company like managers.

4

Availability

These are available at the website of the company or on government data.

These are generally confidential and are not made available for the public use.

5

Period

The time period for which the financial statements are prepared is one year.

The time period for which the statements are prepared depends upon the needs of the managers of the company.

6

Focus

The main focus of the financial accounting is on the past and present transaction.

The main focus of the management accounting is on the present transaction and future transaction which can happen.

7

Form

The presentation format is as per the prescribed laws and regulations and covers the whole entity.

The presentation format is as per the needs of the managers and generally covers the required period.   

8

Details

The financial accounting is standardized and detailed.

The management accounting provides the tailored reports.

9

Basis

The financial accounting is objective, facilitates verifiability and ensures consistency.

The management accounting ensures relevancy, usefulness and understandability.

10

Unit of Account

The unit of measurement is generally in monetary terms.

The unit of measurement is generally in monetary terms or physical terms.

11

Nature

The nature is generally technical as it requires the application of the laws and regulations.

It is generally for use by non accountants.

Usage and Benefits of Digital Dashboards

Because of the aforesaid reasons, the company is required to have two accountants – one is financial accountant and second one is management accountant. Because of the usage difference, the financial accountants are known to be the liabilities and the management accountants are known to be assets for the companies. 

Business Report

To the Board of Directors of Freight Co Ltd.

Sydney, Australia

Title: Usage of Digital Dashboards

Executive Summary

The title of the report is the Usage of Digital dashboard. As the title suggests, through this report the focus has been made on the importance of the use of the digital dashboards in the organization. The main aim of the report is to acknowledge the importance of the digital dashboards and analyzing how the same can benefit the organization in different ways and manner. The second major aim of the report is to understand how the use of the digital dashboards will help in implementing the controls in the overall organization. With these aims, the report is being presented for appropriate action.

The report has been divided into four parts. First one is introduction, second is Digital Dashboards meaning and helpful tool, third is benefits for company and last one is conclusion and recommendation.

The technology has been increasing and developing on daily basis and the companies are required to update themselves on timely basis in order to cope up with the ever changing environment. The digital dashboards are the everyday requirements in the current scenario. Every company is having the digital dashboards installed in their organization and measures the performance of the company over the time and also real time. Our company – Freight Co Limited is into the business of parcel delivery and accordingly the installation of digital dashboards in the organization will be more helpful. At first, the meaning and the uses of the digital dashboards have been detailed and then how the company will be benefited with the digital dashboard has been discussed along with the advantages. The report has then ended up with the appropriate conclusion and recommendation.   

Dashboard is defined as the interface through which the key indicators of any of the process can be looked into. For instance, the dashboard relating to the manufacturing operations of the company will provide the data relating to the number of units sent for the production, number of units produced, number of machine hours used per unit of production, number of units lost during the course of the production and so on. Likewise, other dashboards will provide different reports relating to the major category like human resource dashboard, investor relations dashboard, history dashboard, etc (Milam, 2011).

Conclusion and Recommendation

Digital dashboard is defined as an interface which runs electronically and helps in collecting data from the different available sources like databases of the company where the data is kept, files of the company which are locally hosted and the other related web services (Morgan, 2013).

Digital dashboard is also defined as the tool of management through which the managers of the company can measure and evaluate the performance of the business performance in respect of the key performance indicators as notified by the company. It helps the company like any other management tool to visualize all the data, figures and reports so as to assess the performance of the organization and its business processes at one instance (Morgan, 2016).     

Our company is in the business of receiving and sending the parcel; under the broad category our company is into the logistics services. Every time the company requires the results so as to know the exact performance of the company (Bajzek, 2012). For instance if the company wants to know whether the New Zealand office of the company is working well or not? Whether that branch is generating enough revenue so as to meet out with the fixed costs? These types of questions are generally answered by the Digital dashboard in couple of minutes.

The main consideration in this regard is that the results or the visualization that the digital dashboard gives on the screen is based on the data or data files. If the data or the data files are reliable and accurate with completeness then the results will be fruitful for the company otherwise it will not serve any purpose for the company (Brown, 2016).

In the given case, our data shall be strong to have the real time as well overtime results in the correct and fair manner. The data will totally depend upon the type of question that the company wants an answer (Minnigh, 2014). For instance, if the company wants to have the track over the performance of each of the branches located across Sydney and New Zealand, then the data file should be comprised of income and expenditure figures so as to arrive at the net income and the net profit ratio at any point of time may be it real time or for the past years.

Thus, Digital dashboard will help the company in not only tracking the performance but also help in taking the corrective action thereof.    

Conclusion and Recommendation

The digital dashboards are the requirements for every company in the current scenario without which no company can monitor its business and related activities and controls. Our company is in the parcel business and sends the parcel across India which requires online as well as real time monitoring and controlling and therefore, the installation of the dashboards thus becomes very necessary. In order to conclude the report, the company there is many ways in which the business of the company will be benefitted through the digital dashboard.

It is recommended that the company shall install the digital dashboards in the company system.

References

No of Tickets

Fixed Cost

Variable Cost

Total Cost

Revenue (Commission)

Net Income

0

17000

0

17000

0

-17000

100

17000

4000

21000

9000

-12000

200

17000

8000

25000

18000

-7000

300

17000

12000

29000

27000

-2000

400

17000

16000

33000

36000

3000

500

17000

20000

37000

45000

8000

600

17000

24000

41000

54000

13000

700

17000

28000

45000

63000

18000

800

17000

32000

49000

72000

23000

As per the chart, the fixed cost is the same irrespective of the number of tickets and the variable cost is varying with the number of tickets. As a result, per 100 of tickets 4000 dollars are increasing as a variable cost. Initially there has been the loss but after sometime, the company has started earning profit. The break even has been reached where the revenue equals to the cost.  

A (i) No, I shall not change my decision. It is because the host has not opened the first door and there are the chances that the host is trying to deviate me from the winning door.

Number- Friends

Answer

1

Stay

2

Stay

3

Stay

4

Stay

5

Switch

6

Switch

7

Switch

8

Stay

9

Stay

10

Switch

A (ii) Yes, I shall change my decision. It is because the first door has the chance of 33.33 % winning whereas the second door has the chance of 66.67 % winning.

B Probability of having the disease is 1/ 1000 = 0.001.

No, this is not a rational decision. The chance of having the disease is very less and he shall be working in the job and shall enjoy his life to the fullest instead of selling all the assets and quitting the job.

C  I will adopt the strategy to answer red balls because the number of red balls in proportion to black balls is high and thus the chances of having the red balls each time is high. I will guess red ball will come in the initial picks.

My next guess would be that black ball will come. It is because as per the Monte Carlo fallacy, it is believed that if one thing happens very frequently in the initial period then the same thing will happen very slowly in the later period. Therefore, as in the initial picks we have got 4 red balls; there are high chances that we will be having black balls in the later periods.

D From the above scenarios, every human shall acts as rational and it is very clear that the managers shall think not only rationally but also mathematically before taking any decision.

References

Bajzek, D, (2012), “Inventing the digital dashboard for learning. In EdMedia”: World Conference on Educational Media and Technology (pp. 1084-1092). Association for the Advancement of Computing in Education (AACE).

Brown, W. E., (2016), “Improving the feedback cycle to improve learning in introductory biology: Using the Digital Dashboard” In Proceedings of World Conference on E-Learning in Corporate, Government, Healthcare, and Higher Education (pp. 1030-1035).

Milam Jr, (2011), “ Knowledge Management for Higher Education”, ERIC Digest.

Morgan, M. B., (2013), “The radiology digital dashboard: effects on report turnaround time” Journal of digital imaging, 21(1), 50-58.

 Morgan, M. B, (2016), “Flying blind: using a digital dashboard to navigate a complex PACS environment” Journal of digital imaging, 19(1), 69-75.

Minnigh, T. R, (2014), “Maintaining quality control using a radiological digital X-ray dashboard” Journal of digital imaging, 22(1), 84-88.

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[Accessed 24 July 2024].

My Assignment Help. 'Violations Of Control Principles In Cash Management And Benefits Of Digital Dashboards' (My Assignment Help, 2020) <https://myassignmenthelp.com/free-samples/acc501-weaknesses-and-violated-principle-for-control-procedures> accessed 24 July 2024.

My Assignment Help. Violations Of Control Principles In Cash Management And Benefits Of Digital Dashboards [Internet]. My Assignment Help. 2020 [cited 24 July 2024]. Available from: https://myassignmenthelp.com/free-samples/acc501-weaknesses-and-violated-principle-for-control-procedures.

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