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.
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.
Table of Contents
EXECUTIVE SUMMARY
BACKGROUND
AUDIT SCOPE AND PURPOSE
FINDINGS
RECOMMENDATION
CONCLUSION
Research Objectives and Core Themes
This internal audit report aims to evaluate the management practices and operational efficiency of the Blue Bristol Water Company by identifying risks, accounting inaccuracies, and procedural failures. The primary research goal is to provide the board of directors with actionable insights and recommendations to improve corporate governance, safety standards, and financial performance.
- Identification of financial discrepancies caused by incorrect bookkeeping and duplicate documentation.
- Assessment of workplace safety standards and the impact of negligence on employee well-being.
- Evaluation of supply chain management and the consequences of procurement delays.
- Analysis of recruitment practices to ensure diversity, professionalism, and organizational cohesion.
Excerpt from the Audit Report
FINDINGS
In the book recording of the travel expenses, a wrong entry was made. The final books of reconciliation were affected, the accountant paid twice to each person, this was a result of using duplicate documents to make payments instead of using original documents. This lead to a total loss of 861, 184 dollars. This is after they experienced 17 duplicate documents. The accounts should have made of payment of 38,890 dollars but rather ended up paying 900,074 dollars which was for 242 documents. This made the company lose a lot of money due to the wrong entries by the accountants.
At a plant in LA which is located at Redford, it was observed that the employees in that particular plant were seen without protective work gears which included gloves and masks putting the workers’ health in risk. Later in the same plant it was reported a case of eye irritation to one of the employee due to lack of safety glasses, which showed negligence because that would be an issue that could have been prevented by the company offering these protective glasses to the employees for a safer working environment. In the last financial year it was also observed that a single employee in the company lost a total number of three fingers during process of work.
The accident is observed to have occurred in the machine shop that is in Hoboken, at NJ, and its observed that the main cause of the accident was lack of lax safety standards in that particular place of work. Also it was reported that another work lost his small toe in a place of work too. That accident occurred in the fork lifting area. This particular accident occurred because the required steel toed shoes that the worker should have been wearing were not available, hence the cause of the accident. There were also no protective eye shields in that area of work hence the health hazardous were experienced.
Summary of Chapters
EXECUTIVE SUMMARY: This chapter highlights the critical audit findings, including financial losses from accounting errors, risks in outsourcing, and the need for improved workplace safety and recruitment practices.
BACKGROUND: This section provides an overview of the company's structure, including employee statistics, payroll, departments, and financial performance indicators like EPS and accounts receivable.
AUDIT SCOPE AND PURPOSE: This section outlines the official mandate for the internal audit, aimed at enhancing control, governance, and risk management through the examination of accounts, finance, and IT departments.
FINDINGS: This chapter details specific operational failures, such as duplicate payment errors, severe workplace accidents due to lack of safety gear, and biased hiring practices.
RECOMMENDATION: This section presents a structured table mapping specific audit objectives to corrective actions and feedback from the respective departments.
CONCLUSION: This final section summarizes the main areas of financial and operational loss and urges the board of directors to implement immediate remedial strategies to improve efficiency.
Keywords
Internal Audit, Financial Risk, Corporate Governance, Workplace Safety, Procurement, Bookkeeping, Employee Relations, Outsourcing, Compliance, Operational Efficiency, Asset Management, Recruitment Bias, Capital Expenditure, Liability, Accountability.
Frequently Asked Questions
What is the primary purpose of this audit report?
The report aims to review the management practices of the Blue Bristol Water Company to identify risks, financial mismanagement, and operational inefficiencies that are impacting the company's profitability.
Which core thematic areas are addressed in this document?
The core themes include accounting accuracy, workplace safety standards, procurement processes, recruitment ethics, and contract management in outsourced projects.
What is the main objective of the audit regarding the board of directors?
The objective is to present findings and specific recommendations to the board so they can implement corrective measures, improve working conditions, and mitigate financial losses within a specified timeframe.
Which methodology was employed for this audit?
The audit was conducted based on an approved internal framework, focusing on information gathered from departments such as accounts, finance, and IT to identify control weaknesses and mismanagement.
What topics are covered in the main body of the report?
The main body covers the company background, current accounting failures, safety-related accidents, procurement issues, and specific instances of bias in the human resources department.
What are the primary keywords that characterize this work?
The work is defined by terms like internal audit, corporate governance, financial risk, operational efficiency, and workplace safety.
How did duplicate documentation impact the company’s finances?
The use of duplicate documents instead of original receipts resulted in double payments, leading to a significant loss of over 860,000 dollars in travel expenses alone.
What significant failure was identified regarding the jail construction project?
The company initiated an outsourcing project for a jail construction without including a "right to audit" clause in the contract, which prevented the company from tracking potential cost overruns.
- Citation du texte
- Elena Williams (Auteur), 2017, Internal Audit Report. An Example, Munich, GRIN Verlag, https://www.grin.com/document/359118
