Aat Project Based on the Internal Control of Cookridge

1. Terms of Reference 1. 1. The researcher made investigation on the effectiveness of the internal disciplines and accounting frame of Cookridge Carpets order. It alike has near additional contents such as recommendations that services the c eitherer to repair its strengths and weaknesses to hold dear the guilds reputation. 1. 2. The researcher withal investigated on the stakeholders of the Cookridge Carpets connection, twain internal and out-of-door. The stakeholders play a very important role in benefactoring the corporations growth. 1. 3.The freshlyspaper publisher similarly investigates that the apostrophize and acquires to Cookridge Carpets and express that sendup is a major threat of the society. It is to a fault been recommended by the researcher the terms in which this risks should be avoided. 1. 4. Lastly the researcher also investigated that the requirements of the internal Controls and Accounting organisations Paper is classify of the AAT Lev el 4 Diploma in Accounting. 2. Executive Summary 2. 1. This report investigates the effectiveness of the internal wangles of the accounting trunks of Cookridge Carpets bon ton.The recommendations be also made to manifest airs in which the Cookridge Carpets connection back end improve its constitution and performance. It is investigated that Cookridge Carpets companion single-valued functions the centralized accounting schema. That is, its accounting dodging of rules is d angiotensin-converting enzyme in nonp atomic number 18il show. As findings of the commit of centralized accounting frame were made, it is recommended that the accounts faculty of Cookridge Carpets should be trained and be qualified in order to be competent on their work. Thus improve the performance of the connection. 2. 2. The researcher recommends that the Cookridge Carpets guild should aximize its certificate system to curve the risks of machination in spite of appearance the comp whatso ever. As sanitary as BACS lucrements system should be utilise so that employees and providers argon remunerative straight into their own accounts. This entrust downplay the enforce of cheques and funds as the way of buckle underment hence improving the gilds dedicatement meet system. 2. 3. If in that respect is maximum earnest in spite of appearance the Cookridge Carpets confederation, this will boost the mental faculty members esprit de corps and improve the ascribe require, payments to suppliers and lastly degrade the risk of subterfuge indoors the c anyer-out. 3. Methodology 3. 1.The researcher apply the internet to research the selective retard on how companies run or perform their its caper. 3. 2. The researcher used books as a reference as an addition to find out the reading to help with the report. 3. 3. The researcher also interviewed Managers from different companies on how they run their clientele and what is anticipate in order to run a vict orious product line. 3. 4. A questionnaire was also produced by the researcher and sent to both(prenominal) Internal and external stakeholders to find out their different st consecrategies Of run a successful handicraft. 4. inlet to the Organisation . 1. Cookridge Carpets conjunction is a large automobilepets, soft furnishings and bed dealership in Southampton. It is a main dealer for emailprotected foam Beds and mattresses in the subject and having been established in 2007, it has been trading for the past iii years. It is a esoteric limited federation put in by two br other(a)s, Peter and lavatory Cookridge. 4. 2. The two brothers purchased a large p round of land on which they real An air craft hangar sized building to use as the carpet and bed showroom. They started out selling carpets and then expanded into beds and softFurnishings. In February 2010 Cookridge Carpets Company was asked by Memo Beds to be devolve the main dealership for Southampton as the existing Local dealer was retiring. The two Brothers have been very successful in direct sales and have recently started selling carpets and beds all over the internet. This Venture gullms to have increased concern. toilet is married to Paula, who acted as company secretary for the set-back two years of the companys existence. 4. 3. The Cookridge Carpets company has a relatively flat structure (see Appendix1). This is a eudaemonia to the company because the structure as few levels of wanglement, has wide span of bid, it is decentralized, this means that the communication between the superiors and subordinates is quick and also has high freedom of responsibilities of employees. 4. 4. The Cookridge Carpets companys accounting de break inment system is Decentralized system. This means the accounting systems ar through with(p) in various places. This is an advantage to the company because the decisions indoors the company atomic number 18 faster comp bed to centralized system, the top management has more measure to do other things that argon part of the decision making, and also the system is dynamic, this is it is adapted to change.Leadership style of the company is normally laissez faire because commands within the company is lacking(p) e. g. employees use accounts discussion section computers for their self- elicit. Supervision is also poor, employees do work in their own preferred time. 4. 5. External regulations come toing the transcription 4. 5. 1. The Data protective concealing deport 1998- This regulation states how Cookridge Carpets company should reach outle or manage the mystical selective instruction or data about the business. Cookridge Carpets has to suck in sure that it follows the get along to avoid penalties if the data is disclosed without any egal agreement or accomplish. 4. 5. 2. innovative payment law- This Act states that Cookridge Carpets company moldiness distri neverthelesse payments fairly among employees and must(prenominal) non delay any payments for that matter. Failure to do so the company might face very disturbing penalties such as fines and so on 4. 5. 3. Health and safety legislation- Cookridge Carpets must company must Comply with the Act by making sure its customers or employees atomic number 18 having a skilful safely on the job(p) environment free from threats or hazards that may travel their health. 4. 5. 4. The companys Act 2006- This Act regulates that Cookridge Carpets ust sterilize financial educational activitys and settle them so that they argon ready to be analyzed. Fraud Act 2006- down the stairs fake act 2006 a person may face penalties if they assault one of the sections 2 (fraud by false representation), section 3 (fraud by failing to disclose reading) and section 4 (fraud by abuse of position). Cookridge carpets peculiarly the accounts section should misrepresent sure it abides by the Act to avoid penalties level off imprisonment or even unlimite d fines. 4. 6. Cookridge Carpets Internal Stakeholders 4. 6. 1. Owners- Peter and deception Cookridge be the owners of the Cookridge Carpets company.As the owners of the company, their responsibilities argon to make sure that the company pays tax harmonise to the principle. They also profitsr at the financial arguings of the business to see if the business is making a profit or loss. They also look at the be of the the business as puff up as turnovers and also make budgets of the their own business. 4. 6. 2. Management- The senior accounts clerk is amenable for the management of the business. He is responsible for managing the accounting module and making recommendations reports establish on the weaknesses of the accounts system to improve them.Also to focus on the payroll system to make sure that it complies with the payroll Act required. 4. 6. 3. Employees- The business employed 20 members of faculty nine tell Sales stave, three internet sales rung, two cleaners, two car delivery drivers, one accessory salesperson and lastly three part time rung in the petite accounts departments. 4. 7. Cookridge Carpets External Stakeholders 4. 7. 1. Customers- Cookridge Carpets customers are owners of small business shops or stores who buy their greats from Cookridge Carpets and sells to other customers from their own shops. This is an advantage to both arties because the hard currency black market is universe generated. 4. 7. 2. Suppliers- The supplies of Cookridge Carpets are manufactures of Goods including foam beds, mattresses and carpets. Suppliers will be foc using on the payments for untroubleds creation supplied. The financial statements will provide schooling to decide whether to provide credit to Cookridge Carpets company. 4. 7. 3. Bank- This is the main stakeholder of Cookridge Carpets because it deals with the financial accounts of the company as the company is facing some overdraft challenges. If the overdrafts rents to be repaid this might affect the companys budgets and funds flow thus isturbing the companys performance. 4. 7. 4. Westbridge Finance- Cookridge Carpets company offers monthly Payment terms to all customers at 6months wager free credit. Once this period expires there is an annual interest rate of 28. 4%. the company finance this through Westbridge, which charges an annual rate of 8. 7% to the company. 4. 7. 5. The debt collection agency- This agency charges ? 80 per case to Cookridge Carpets company plus 30% of any monies collected. 5. The Accounts Department 5. 1. Cookridge Carpets has accounts department office which is located on the setoff floor of the showroom.Access to the office is by a set of stairs at the rear of the building. Toilet facilities for mental faculty and customers are also on the first floor, so the stairs are used by the members. The accounts provide are responsible for preparing sales invoices and to manage credit accounts. thither is a wait room for customer service. The accounts department use the code in the organization. 5. 2. The accounts department is mainly used to prepare and fare all sorts of activities on work of the accounts involving sales and purchase ledger and payroll. 5. 3. The accounts department internal stakeholders 5. 3. . Peter and buttocks Cookridge- These are the owners of the Cookridge Carpets Company, as the owners of the company, their responsibilities is to make sure that the company pays tax jibe to the principle. They also look at the financial statement of the business to see whether the business is making a profit or loss. They also look at costs of the business as well as turnovers. 5. 3. 2. struggle Clerk- This field is responsible for the preparation of the weekly and monthly payroll information. To absolutely calculate all monies due requital and commission. To make up pay packets for the weekly paid staff nd prepare BACS arrests for monthly paid staff. To prepare all associated returns and documentatio n and willing to reduce extra hours as required. 5. 3. 3. Accounts Clerk 1- The accounts clerk is responsible for preparing sales Invoices (sales ledger) in the accounts receivables. trusty to manage credit accounts. To ensure that all payments are made with 90 days. To prepare monthly management information and must be willing to undertake extra hours as needed. Also responsible for security of information and security of cash. 5. 3. 4. Accounts Clerk 2- The accounts clerk is responsible to check GRNAnd purchase invoices in the accounts payables (purchase ledger). Responsible for liaise with carpets, beds and soft furnishings suppliers. To manage accounts payable accounts. To ensure that all payments are made accurately and on time. To prepare monthly management information and must be responsible for security of information and security of payments. 5. 3. 5. old Accounts Clerk- Responsible for managing the accounting staff and making recommendations reports based on the weakne sses of the accounts system to improve them. Also to focus on the payroll system to make sure that it complies with the payroll Act. . 3. 6. Stores Staff- These are the companys additional staff that helps with customers. They work mainly in stores and require complete supervision and accurate help from the accounts members. 6. Review of the Accounting arranging 6. 1. The researcher investigates the accounting system of Cookridge Carpets and also makes recommendations to improve the system. 6. 2. This section also investigates the financial reports the accounts system should hand to their stakeholders and to see if it is acceptable to agree or to beseeming the companys needs and the stakeholders needs. The trengths and weaknesses are aided in the turn out digest (see vermiform process 2). 6. 3. Working methods and practices 6. 3. 1. Strengths in the workings methods and practices within the systems of Cookridge Carpets are stated in the SWOT digest in appendix 2 as follows * The Cookridge Carpets companys accounting system and Inventory system operates its payroll system using Sage Payroll to calculate the employees weekly salary and salaries. It uses Microsoft surpass and the invoices are made using Word document. The computers undersurface also access internet which is helpful to the employees to search and get information they need quickly. The company also has an alarm within the premise which is used to reduce the risks of theft within the company. * there is also the use of tidingss on computers to protect mystic information from being disclosed or stolen. 6. 3. 2. Weaknesses in the working methods and practices within the systems of Cookridge Carpets are stated in the SWOT analysis in appendix 2 as follows * There is lack of back-up of important information of the company and this put the company at risk of losing this important information. * close to of the employees are non familiar with using the current systems like Microsoft leap o ut and Sage payroll system.This is not devout for Cookridge Carpets company because this might sink to errors in important data or documents of the company. * There is lack of discipline within the company. For example, some employees may just use the Accounts department computers for their self- interest like shopping on line. This is not bang-up for the company because the computers are reserved to keep cloak-and-dagger information and should not be used by un legitimate staff members. * There is lack of communication in the company which may lead to poor decision making and action plans. * There is poor security within the company. For example, there was a ase when John found the door of accounts department unlocked. * There is lack culture for each of the roles within the organization. * There is lack of planning within the company. This is not strong the company because this will make some errors in the business and the company would not be able to meet its goals or fail to meet its goals. * Most Cookridge Carpets staff is part time workers. This is a disadvantage because there are not on tap(predicate) in the office at all times to monitor the companys performance or victorious part in some tasks needed for the performance of the company. 6. 4. Record care System 6. 4. 1.Weaknesses in the record keeping system are stated as part of the SWOT analysis in appendix 2 as follows * The Cookridge Carpets company payroll is done manual(a)ly, this is not unspoilt for the company because errors may easily result or fall out. * Most staff is not comfortable or highly trained effectively on the use of Microsoft Excel system and the Sage payroll system. If they continue using these systems, errors on documents such as spreadsheet may build up and cause the company to produce faulty financial reports of the business. * There is no work being done for other members of staff when they are absent at work.Important or urgent work is there for done manually f or them. This is not salutary the company because errors may result in the work being done. * The staff take cash now from the till and the lower-ranking cash is not properly save. * Wages are done manually and in advance, indeed are not accurate. * The staff hours are recorded manually and the reward are calculated manually by the basic hours made by the staff leading to inaccurate payment. * There is lack of security within the record keeping department. This is not good for the company because confidential information may be stolen to be used against the company. . 5. Training of staff 6. 5. 1. The weaknesses in the learn of staff of Cookridge Carpets company are stated in the SWOT analysis in appendix 2 as follows * Cookridge Carpets employees lack planning in their accounting field. This is not good for the company because it leads to lack of friendship and understanding about general controls and the company procedures. Errors may also drop dead due to lack of train, this might affect the performance of the business. * Cookridge Carpets staff is also lacking training on the use of the current systems.For example they are unable to used the pivot tables in the excel spreadsheets and the as well as the Sage payroll system. This is also good for the company because it sewer cause for further errors to the business. 7. Internal controls and analysis of fraud 7. 1. Internal System of Control 7. 1. 1. Cookridge Carpets companys imperious system is not that productive, in other words is informal. The companys control system is based firmly on trust. This is not good at all for the Company because fraud sack be easily arises. Formal internal controls system is good for Cookridge Carpets because potential risks of fraud may be decrease. . 1. 2. The internal control system weaknesses are identified in the SWOT analysis in appendix 2 as follows * Passwords One password is being used to access the accounts department systems. All employees can be able to use the password in accounts office, this is not good for the business because the computer stores confidential information which is not forgoed for the members of staff to see or disclose without any legal permission. * Wages- Wages are calculated and recorded manually within the business. This is not good for the business because inaccurate results or documents about wage are being produced.There is also no control in place for who collect staff reinforcement and take are not write for in the business. * Petty Cash- There is no petty cash control system within Cookridge Carpets at all. The issue forth used from the petty cash is not recorded, which is also not good for the company because it influences the risks of theft within the business. * Cheques- The control system of the business involving cheques within the company is very poor. It is poor in the sense that mindless cheques are signed and left with staff. The system is also poor because the office where the chequ e books are kept can be left unlocked. Cash- The controls in regard to the use of cash is very poor within the business. Cash produced is normally used to pay wages of the staff and also calculated manually. Tills are also not counted for the amount taken is also recorded manually. * Counter Signatures- Cookridge Carpets companys controlling system on wages is not effective. Wages are not cross checked to prevent some errors that may easily be produced. * Credit Control- The companys control in the credit control system is not that adequate. The company use or seek help from the credit reference agency when they grant credit to customers. New supplier and customers- Cookridge Carpets company has poor controls in regard to newly customers and suppliers of the company. This is bad for the business because confusions between old and new customers and suppliers can be created and cause somber problems to the business. * Authorisation- Cookridge Carpets lack effective authorization con trol. Wages are not authorized in a formal manner because they are calculated and recorded manually. This is not good because errors can easily occur. Cheques are also needed to be signed by the owners. 7. 2. depth psychology of fraud 7. 2. 1. There are possible frauds that could take place within theCookridge Carpets companys control system. There are no evidence were the searcher found cases of fraud within the company. The effective controls should be staged that prevents such cases. 7. 2. 2. The SWOT analysis in appendix 2 shows the weaknesses within the system as follows * Cheque books are not safely stored in a secure place. This is not good for the company because the cheque books might get misplaced or they can be stolen. * The company use cash to pay wages which is not good for business because cash can easily get stolen by the employees without anyone noticing. The risk of fraud can easily take place in cases were cheques are signed and left blank for staff to use when th e owners are not at work. * There are ways in which the staff can just take money directly from the tills instead of using the petty cash system. This is not good for the business because the staff can take the business money for their self- interest and dont return it back or pay for it. * Cash is used to pay the members of staff and the payment is calculated and recorded manually. This is not good because errors may occur and this could make the staff to be paid more or slight than the correct amount they should earn. . Recommendations to improve Cookridge Carpets Accounting System 8. 1. The following are recommendations that can be made to improve the weaknesses found by the researcher. 8. 1. 1. The password used to access the system must be changed to Avoid the risks of disclosing confidential information and to reduce the risk of fraud. The staff of Cookridge Carpets must be cognizant of the need to have the effective controls to work efficiently. 8. 1. 2. Cookridge Carpets c ompany staff must be given formal accounting training to improve on their weaknesses in order to reduce or eliminate possible errors.This could also help them to have much understanding of the importance and the need for controls within the company. 8. 1. 3. Cookridge Carpets should make controls that deals with new suppliers and customers to the accounts system. The owners should be amply involved to reduce the risks of fraud within the business. 8. 1. 4. The company should also introduce the effective petty cash control system within the organization. This will benefit the company because the petty cash would be recorded appropriately and this would reduce the risks of fraud as the cash taken from the till would be recorded. 8. 1. 5.Cookridge Carpets company should back up its system. This will benefit the company because the important information would not be lost in the event of a system failure or if incidents like fire outbreak occur. 8. 1. 6. The Senior Accountant should be in full responsible for the management and operation of the new system introduced within the Cookridge Carpets company to avoid poor performance of the company and maintain efficiency and effectiveness. 8. 1. 7. The company must make payments to employees and suppliers by BACS. The payment should be made directly into bank accounts to reduce the use of cash and cheques for payments.This will benefit the company a lot because the risks of fraud and theft would be controlled as well as errors made during Calculations as the company make calculations manually. 8. 1. 8. Cookridge Carpets company should interpret that it keeps cheque books in a locked and secure place like a safe. The system of signing blank cheques should also be stopped. The Senior Accounts clerk should be put in control of signing cheques when the owners are upset. This would reduce the chances of fraud within the business. 8. 1. 9. There should also maintain a fully up to date register of working taff hours to ens ure that staff are at work at required times. Cookridge Carpets company staff must always be informed to cover for each others absence to continue the working ramp up. This will be a good advantage to the company because the performance will improve. 8. 1. 10. Staff should also be trained on the operation of the new systems like the use of Microsoft Excel spreadsheet and the Sage payroll software. This would benefit the company because the staff would be having functional skills hence improve performance and efficiency of the company. 9. Cost benefit analysis 9. 1. The following is a completed cost benefit analysis of the ecommendations to introduce a centralized accounting system within Cookridge Carpets company 9. 2. cost 9. 2. 1. Cookridge Carpets company would need to purchase effective equipment for the network of computers. The organization would rather buy cables or use a radiocommunication network. The costs of all this is just about ranging between ? 600-? 1,600. Wirel ess network would be faster than cabling but the connection could be lost on some occasions. Cabling on the other hand would be more reliable because it is less expensive compared to wireless network. 9. 2. 2. The staff can continue using the current manual system f the organization face some disturbance or disruptions to the new system. As the work agitate will be a lot, additional staff will be needed to enter data about exceptional documents of the organization so that the system would be fully operational. This would require costs of approximately ? 3000. 9. 2. 3. The organization would also need to look at costs of introducing procedure manuals to ensure staff can use the system and a rota to cover some elements when some staff are not available at work. The senior accounts clerk will need to monitor this progress and would take approximately 30hours of their time f the workload is too much. 9. 2. 4. Cookridge Carpets company would also need to purchase centralized accounts c omputer software such as Accounts Professional which has been designed for both small and big companies. There are different types of packages of this kind and the company will have to choose which package is best suitable and needed by the company. This package would cost approximately ? 3,500 depending on the quality and size. The package should be simple to operate and should come with instructions on how it is used. 9. 2. 5. If the staff finds it more complex to use or operate the package urchased, the company would have to provide training for staff. Courses for staff would cost approximately ? 500-? 700 depending on the level of training. 9. 2. 6. As part of training on the operational of the new accounts package purchased, these would be an fortune cost of the staff not be available at work. 9. 3. BENEFITS 9. 3. 1. Cookridge Carpets would need to complete the centralized system reports including the financial system of the business. This could be monitored by both the owners of the business or the senior accounts clerk to ensure that the business is running ccording to plan and the cash is being generated and managed effectively. This reports treat would include * Payroll Reports * Income Statements * develop debt analysis * Supplier payments reports * Statement of financial position * Cash flow statement * Costs by cost centre/code * Analysis of petty cash expenditure 9. 3. 2. Cookridge Carpets would need thee cash flow statement to help the owners John and Peter to study the cash flow of the organization. It could also help them to manage the cash more effectively and efficiently to disparage the overdraft and other fees within the business.It could also help them with planning and budgeting other cash expenditures of the business. 9. 3. 3. The organization would need the age debt report to improve the system on making debts and to make sure that the customers who do not pay the business on time are closely monitored in order to denigrate the iss ue. This could also make it difficult for the customers to misuse the current controls thus many an(prenominal) bad debts would be closely prevented. 9. 3. 4. Payroll reports of Cookridge Carpets company would be more accurate and up to date on rules and regulations set by the business. This would minimize confusions and ill-advised payments ade doing calculation thus improving the staffs performance and efficiency in work. 9. 3. 5. Cookridge Carpets company would benefit a lot on using a centralized system because it will be used as a back up just in case the system being used breakdown. Cookridge staff would continue with their tasks if one of the computers fail to function or breaks down. There will be reduced risks of losing important data because if the main system fails to work, it would be operational formerly again and this time would be fast in performance. 9. 3. 6. Another benefit to Cookridge Carpets would be the formal training of staff.This would be helpful to the bu siness because it will increase and improve efficiency and effectiveness of staff on their work. Their morale would also be meliorate thus bring commitment to the organization with lower staff turnovers. The morale of the non- accounting staff would also be improved due to the accurate and complete wages. 9. 3. 7. Cookridge Carpets would benefit by having an improved cash flow system because the supplier reports on payments are use and suppliers are paid on time. this could further more benefit the credit terms and conditions that suppliers grant Cookridge Carpets company. 9. 3. 8.Another benefit of the company would be the lower risks of fraud prevented by the improvement of the controls within the system as well as improved control cost. Reports on costs would help the owners of the business with the payments and wages and states where some costs are higher or lower than expected by the business when they are finally analyzed. 9. 3. 9. The business would use the statement of fin ancial position to show the assets and liabilities of the company. It would also show details of the receivables (debtors) and payables (creditors) and allow the owners to have a regular and more accurate picture of these. This ould help the company to highlight any issues with the size of payables and receivables. 9. 3. 10. The business would also benefit by using the income statement to show the owners of the company the income or tax revenue received received and the costs of the business. This could show profitability by month or by product depending on the details required. This would help the owners with decision making and analyzing the business and would highlight key costs such as bank interest. Appendix 1- Organization chart Appendix 2- SWOT analysis STRENGTHS WEAKNESSES * There is an alarm code they set every day even when they lock up. * Access to the accounts office on the first floor is scant(p) because the keypad lock is never used. * All computers are loaded with accredited software owned by the company * The password used on all of the computers is the same and never been changed. * No member of staff is allowed to load any software onto the computers without subsequent permission from the manager. * The check book is not kept in a perfectly safe area. * No self-appointed devices are to be used for saving, uploading or downloading work other than those purchased and pass by the company. * There is lack of control as all staff can get access to the accounts office with the common password. * No illegitimate discs, memory sticks, external hard drives or other devices are to be used within the accounting system. * Cash being generated is used to pay wages this is not good for the company because it increases the risks of theft. * Only authorized members of staff are to use computers. * There are high risks of errors within the business as some staff is not qualified in accounting. * The account information of beds, carpets and sof t furnishings are kept on Microsoft excel spreadsheet. * The register information of beds, carpets and soft furnishings are kept on Microsoft excel spreadsheet. * dickens new computers were purchased by Cookridge Carpets Company and are both running the Windows thought operating system. They are also loaded with Microsoft Office 2007 ( with a three user license) . * There is lack of control concerning the petty cash system some staff can just take the money from tills without preserve the amount being taken. * There are also two new computers purchased and loaded with Sage Payroll software. * Some staff has lack of fellowship on using the new systems like Microsoft word excel. This is not good because it might cause plenty of errors within the business. * When the computer system was set up, a password was installed to protect the information stored on it. * Invoices are processed manually this is not good for the business because errors can easily be made during processin g. * The cash taken from tills is not recorded this is not good for the business because risks of fraud and theft may easily occur. * There is inaccurate staff pay due to lack of controls on staff hours and manual calculations of wages. * Payments to suppliers are made without informing other staff members. This is not good because it may lead to high chances of fraud. * There is lack of authorization blank cheques are signed to cover absence. * There is inaccurate staff pay due to lack of controls on staff hours and manual calculations of wages. OPPORTUNITIES THREATS * There is an opportunity to introduce some back up staff to cover for those who are absent so that work can continue being done without any delay. * If staffs who lack association and experience continue using the spreadsheet and some other software, it will bring threats to the business. Errors will be made during the working progress therefore the results of the data being produced would be incorrect and inaccurate. * There is an opportunity to introduce formal training to staff that lack knowledge and experience in accounting and also the new system they use like the use of Microsoft excel spreadsheet and new software introduced by the business. * If the company does not back up its current systems, there will be a threat of losing some important data of the business when the system in use breakdown. * There is an opportunity to introduce close supervise and control of the payroll system and internal canvass to the companys accounting system. * It appears that one password is used to access the accounting department system. This is a threat to the business because the computers are likely storing confidential information which is not supposed to be seen by the staff without any authority or permission. * There is an opportunity of using new systems such as the Microsoft excel spreadsheet to record and calculate data. This is good for the company because recording data manuall y will be replaced. * Using cash to pay wages of the employees is a threat to a business because fraud and theft can easily take place within the business. The wages may on the other hand be incorrect due to the manual calculations. * There is an opportunity to introduce some back up staff to cover for those who are absent so that work can continue being done without any delay. * It appears that office staffs are paid by cheques. This is a threat to the company because the frequent use of cheques can lead to risks of cheques being stolen or fraudulently used. * There is an opportunity to introduce formal training to staff who lack knowledge and experience in accounting and also the new system they use like the use of Microsoft excel spreadsheet and new software introduced by the business. * There is a threat of making incorrect and inaccurate invoices due to manual completion of invoices. * There is an opportunity to introduce close monitoring and control of the payroll system a nd internal audit to the companys accounting system. * If staffs who lack knowledge and experience continue using the spreadsheet and some other software, it will bring threats to the business. Errors will be made during the working progress therefore the results of the data being produced would be incorrect and inaccurate. Appendix 3-Fraud Matrix Potential Fraud Current Control Risk To The Organization Recommendations