Table of Contents
AUDIT SCOPE AND PURPOSE
According to the final report, the following are the most recommended areas of the audit and should really be considered first. Wrong entries, it was observed that due to the wrong entries of the employees that travelled, a lot of money was lost in the process and therefore if this gets experienced again then the company would be in a high risk of losing a lot of money. The accountant should be encouraged to use original documents when making the payments because it is at that point that truck was lost and a lot of money disappeared.
In the event of outsourcing, the company should always ensure that they a contract of work between them and the involved company, so that the company can monitor and audit the project whenever they want. Lack of this would make the companies resources be embezzled in the process and also a lot of money might end up getting lost in the process. In the jail project there was no contract and therefore the audit process was not done meaning that the company could not have an idea how the funds were being used
The issue of employee’s insecurities should be looked into immediately. The company might end up to be sued later maybe the employees who get into accidents, and this might lead to a lot of money been used for compensation. Also this hinders the employees from good performance of the work. The employees need a good and risk free area of work so that they may perform fully and be effective in production; this means better sales and more profits to the company (Abbott, Daugherty, Parker & Peters, 2016).
The purchase department created a great loss to the company. Their late submission of the required materials made the company experience a lot of expense in purchasing other products. They should make sure that they have done their submissions in time to a lot of expenses. These late submissions caused the sales of the company to also drop significantly making the company to experience a very high loss and also purchase the items at very high prices.
The human resources should ensure that they have proper job advertising. The whole public will be aware of their vacancies. If many of them apply then the company would be able to get the best applicants, this is a good thing to the company. it leads to a greater professionalism and also the company would be able to perform better, but if they concentrate on the same ethnic group then even the less qualified might get the jobs they are not well at performing. This kind of public advertising is also a good form of creating good relations with the society, therefore creating good rapport.
The audit report scoped to review management across the company practices. The company has a total number of employees that totaled up to 2,200. Among the total 2,200 employees, only 900 employees were salaried. For the remaining 900 employees, it was found that they had a total payroll of 739.0 million dollars. The rest of the 1,300 employees who were casuals had a payroll of 997.0 million dollars.
The hourly workers were unionized by Brazil, Canada, China, Mexico, Moldova and United States of America. They received total benefits of 119.0 dollars. The purchasing department which is responsible in acquisition of supplies, procuring all the necessary materials for manufacturing, evaluating prices, paper work and accounting and policy compliance, had a total number of 32 employees which included 3 temporary employees. The industrial engineering department which responsible for evaluation of programs those workers, machines, materials, energy required for production and information for all machinery and how to operate them had a total number of 8 employees.
The annual purchases, which are the inventory purchases throughout the year were amounted to 2.2 billion dollars. The total revenues, which are the total receipts of the quantities of goods and services, that is, the total income in the company amounted to 12.2 billion dollars. The accounts payable which are the obligations to pay off a short term debt to creditors was highly centralized with only employees.
Annual project expenses which are the costs of owning and operating an asset were valued at 64.1 million dollars annually. The company used research centers that were in the United States of America and china, which were used to discover products and manufacturing products that would make the production process effective and easier for better developed products. It was also recorded that the plant that was located in china had just been expanded. In the year2015 the EPS was recorded at 3.05 dollars, however, in the year 2016 a decrease of 0.22 dollars was experienced making the new EPS to fall to 2.83 dollars.
Accounts payable which represents the amount of money a company owes its suppliers had been launched in year 2015. And the accounts receivable which are the legally enforceable claims held by the business for any good supplied or even a service rendered to customers ordered and not paid had totaled to 2.0 billion dollars.
A new line of credit was later established with the global bank international. The new of credit had a direct benefit to the bank because they are new credits extended to the company by the bank which meant they would have different borrowing rates from the different borrowers. In the second half of 2015, a new product line was established. This meant that the company introduced different related products under its single brand. The call center of the company co sourced accounts receivables from India. This means they outsourced a certain business activity in place of the money owed by the company. A new general ledger which keeps a chronological accounting system that keeps financial transactions of the business was launched in the year 2014. This meant that the old system of book keeping was done with as from the year 2014 all transactions were recorded in the new books of recording. As the general book of ledger were being launched also the purchase books were also upgraded. Meaning the systems of the purchase systems were upgraded to better versions.
Canada, replaced the petty cash in 2013. The petty cash which was store of money placed by company for miscellaneous spending was replaced with p card that allowed goods and services to be procured without using solid cash. In the year 2012 as the general ledger system was launched, the integrated employee relation was also launched, meaning that the employees had new work ethics and relations that helped work together harmoniously for better productivity. Also it was established the employees who traveled for business purposes were been issued AMMEX cards that they would use during their travel so that they would be monitored what they had spent on during the trips.
The logistics department which involves coordination of effective forward, efficient, reverse flow and storage of goods was resourced to a new supplier. In 2013 the Michigan plant received incentives. Incentives mean the one given to a company from an outside source for expansion. Therefore, they offered training to employees and therefore this lead to the plant expanding. Additional common stocks shares were issued to the company in the year 2013. Common stock share is the security offered to business in the event of bankruptcy. An additional long term debt was issued in august 2013. Long term debts were the financial obligations that last for more than one year.
AUDIT SCOPE AND PURPOSE
An internal audit of Blue Bristol Company was conducted in accordance to an approved internal audit by the board. This report records the internal findings and recommendations that the board came up with in order to improve the operations department, get better working conditions, improve efficiency and effectiveness in the particular risk that was identified.
The matters that came and up and got discussed are only the ones that came up to the attention of the internal auditors. The main problem was negligence of the employees and some other expenses that could not be accounted for because of ignorance by employees or wrong entries in the books of entries. Therefore, the problems that caused a lot of losses to the company or the ones that greatly affected the employees were to be presented to the board of directors for implementation over a given specified period of time; however, the report might not contain all the risks and problems in the department, due to withdrawal of information from the people in departments.
The main reason why the auditing on the company was done was to enable the company in achieving its objectives. It was conducted to improve the control, governance and risk management of the company. the management was systematically involved to help identify the risks and mismanagement that were been encountered in the organization. The areas that contributed to the findings in the company included the accounts, fiancé departments and the IT. The auditing was to find out the areas of efficiencies or innovations.
- Quote paper
- Elena Williams (Author), 2017, Internal Audit Report. An Example, Munich, GRIN Verlag, https://www.grin.com/document/359118