Assessing Internal Control Issues In Bucks Phyz: A Medium-Sized Enterprise

Restructuring of Bucks Phyz

Prepare a business report to the CEO summarised overview of the Sales Process for Bucks Phyz.

Bucks Phyz can be considered to be a developing industry, that is to say a medium sized enterprise that is undergoing restructuring programs since the past two years. Essentially, the restructuring program occurs in the sales team and functional environment of the business. Apart from this, yet another considerable alteration also takes place in the workforce of the corporation. Workers of the corporation are regularly shuffled and new tasks are assigned. Owing to these kinds of alterations in the business concern, it can be observed that there are certain redundancies in the operations of the workers and this subsequently leads to blurred accountabilities. Furthermore, the company Bucks Phyz has currently encountered fraudulent actions in the accounting section of the firm directing towards revenue loss and deterioration in the firm’s figure of sales. Taking into consideration the fraudulent actions in the corporation, management of the firm intends to employ new accountants for restructuring processes and roles of employees and challenging operating environment for the corporation Bucks Phyz. Basically, this study is meant to assess diverse issues along with internal controls of the corporation in order to make it more productive.

Bucks Phyz is necessarily a medium sized enterprise that acquires an annual turnover of $2.5 million. The corporation has currently undergone organizational restructuring in a bid tom make it able enough to develop its business and resolve the issues associated to internal control. Basically, new tools of pricing introduced by the corporation can be considered to be a major process of restructuring that has occurred in the past two years. Both standardized as well as specific processes is existent in the corporation, nonetheless they get messed with one another making the operating environment intricate (Adenike & Michael, 2016). Bucks Phyz essentially has an obsolete online template that necessarily does not match with the standards of the market, leading to decline in the level of revenue. As such, procedure of credit check out of Bucks Phyz is not credit worthy and can earn the company a “C” rank.

Different internal weaknesses can be observed by the currently employed accountant of the firm by undertaking detailed analysis of operations of the firm Bucks Phyz. Essentially, the weaknesses of the corporation are hereby mentioned in a table below:

Analysis of the operations of the firm and evaluation of feedback from employees helps in identifying different weaknesses as regards processes as well as structure of business. Essentially, there is inadequate credit worthiness particularly in online template of both sales as well as service section.  Lack of code of firm’s employees has directed towards fraudulent actions that in turn jeopardise tasks and lead to decline in overall efficacy of the employees. Furthermore, accounting segment of the firm Bucks Phyz has lower level of rating owing to low efficiency in the activity. In essence, the corporation has nevertheless failed to acquire higher level of profit during the past two years and led to write offs of approximately $1 million. Recent alteration in firm’s accountabilities also has hampered the strategy of sales and decreased revenue of the firm (Ismail & King, 2014).

Internal Weaknesses of Bucks Phyz

Corporate credit card can be considered to be stimuli for particularly the medium sized enterprises such as Bucks Phyz that generates annual turnover of around $2.5 million. This can provide vested advantage that can augment morale of the workforce and help them save vital time, lessening the time to lone customer. This can prove to enhance the efficacy of the corporation and assist in making the employees efficient and subsequently simplify their tasks (Zhou, 2015). The management also needs to bear in mind past fraud actions by firm’s workers. However, in case if the workers are assigned with specific corporate credit cards, then this generates a chance of under utilization of card and augments probabilities of fraud.

As mentioned earlier, an effective credit policy can make certain proper usage of credit card and lessen the overall scope of fraudulent actions (Uyar et al., 2017). In view of the structure of the corporation Bucks Phyz, it can be hereby stated that firms have the need to bring in credit cards to the workers who are necessarily related to the core team for management. Nevertheless, management of the firm can follow certain steps and mechanisms of internal control to minimize influence of corporate credit strategy:

• Ascertain the eligibility criteria of specifically holding a corporate credit card
• Establish credit limit
• Control the overall revocation as well as issuance rule
• Examination of annual credit of workers who are issued the credit card (Prasad & Green, 2015).

In n bid to control the identified issues the management of the corporation Bucks Phyz can highlight the following recommendations:

-Introduction of code of employees is significant as this can help the firm to control and monitor fraudulent actions (Laudon & Laudon, 2016). 

-An appropriate appraisal mechanism can prove to be an advantage for the firm as this can help in inspiring employees to work sincerely

-Identified issues associated to new pricing tool can be mitigated with immediate effect and managers can look into the matter whether employees are inserting data faultily

-Corporate credit card also have the need to be issued, however the distribution need to be limited to the core management team for reduce possibility of fraud (Adenike & Michael, 2016).

Conclusions

The current study helps in analysing diverse aspects of the firm Bucks Phyz associated to internal control of the corporation. The study has assessed the likelihood of fraud and focussed on the suggestions in a bid to lessen the scope in the upcoming period. Bearing in mind the feedback of the employees, it can be inferred that restructuring has become forceful on the internal control, and it has delivered some undue advantage to core management team to curtail strategies. Analysis presented above also reveals that access to ERP, lack of code of employee lead to increase in fraudulent actions. However, for handling the dwindling state of affairs, this study has stated several effective strategies.

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