Answer to Question #300876 in Accounting for Joel

Question

Think of a company you may have worked for or one that you may be interested in working for. Once you have determined the company, write a paper that answers the following questions:  

• What is the name of the company?
• What are the company’s accounting and organizational internal control procedures? 
• What are your suggestions for the company on internal controls improvements? 
• Has the company ever experienced fraud? 
• What is the company’s plan to reduce fraud?

Answer 1

(A)What is the name of the company?

I am currently working for KENYA POWER COMPONEY located in Kenya. It is company that deal with electricity transmission in all of Kenya.

(B).What are the company's accounting and organizational internal control procedures? The control procedures implemented by the company are:

Establishment of clear responsibilities. This is the first rule in every field of the company: when there is a new job, decision to make or a variable, there must be a manager who follows and controls it. Ours, being a relatively small company, is heavily based on personal responsibilities and any mistake would also be very difficult to cover.

Adequate insurance. The company also has insurance in the event of internal theft or fraud of assets in order to possibly compensate at least the economic damage.

Separation of assets from custody. Within our company, we have small amounts of cash in the safe for express courier duties or other daily business expenses. This cash is managed entirely by employees but with care: in fact, those who spend them must always ask and bring the invoice to an employee who does not deal with these payments but only records them. At the end of the month, a cross-check between the 2 employees takes place.

Use of technology. The company is equipped with surveillance cameras that guarantee safety especially on weekends and on public holidays. The whole department is guarded, including the surrounding outdoor areas, which are always owned by us. Furthermore, to avoid the loss of sensitive and crucial data for our business, we have a backup system and a supplier to keep them safe in the cloud.

(C).What are your suggestions for the company on internal controls improvements?

My suggestions for improving internal controls are:

Have document templates for each transaction. It is a procedure that for the current size of the company would also seem to be a bit too rigid, but when it comes to safety there is never enough. The risk is in fact that some transactions are lost and someone can take advantage of it.

Make an inventory more frequently, since we trade many boxes of products per year of fragile products (cups) it is very easy for there to be broken goods or for the warehouse worker to make a mistake in counting so there are inventory differences. Unfortunately, it will never be known if these are due to an actual breakdown of the goods, a human error or bad faith of the staff.

(D).Has the company ever experienced fraud?

Fortunately, we have never experienced serious fraud of any kind. The only unpleasant episode occurred during the company's summer closure when two thieves broke into the offices but only stole the safe with less than $ 1,000 inside. A few hours later the thieves were caught not far from the theft area in an attempt to open the safe. We have been compensated and the thieves arrested.

(E).What is the company's plan to reduce fraud?

Since that day of the theft, we have installed the cameras so we are a company that learns from its mistakes. The next steps I believe will be towards preparing templates to fill out to record transactions. We have also recently installed a brand new alarm with the latest generation sensors. Surveillance is now connected to all cell phones of executives who are immediately contacted.