MAF 680: CASE STUDY: A DELIMA
ACCOUNTING SYSTEM
ISSUE
: MYOB Software not integrated
DOCUMENTS ARE NOT PROPERLY PRE-NUMBERED,
RECORDED & DOCUMENTED
FINDINGS:
Sales invoice & PO are manually produces & not pre-numbered
- Asset purchased not recorded.
- Unrecorded cash withdrawals.
* Negative impact on FS & Cash Flow
TIMESHEET ARE MANUALLY PREPARED BY EMPLOYEES
ISSUE:
-Employees record their time in & out themselves
-No staff in charge and monitor employee attendance.
SITI HAJAR BTE ZAMZANI 2010750647
KU NURNAJUAWA BTE KU AHMAD 2010385929
NUR JAZILAH BTE NOR IHSAN 2010569539
NUR`ATIKAH BTE MAT DAUD 2010355373
NUR AIN BTE ADNAN 2010985877
NOR SYAFINAZ BTE MISNON 2010594391
NO STANDARD OPERATING PROCEDURE introduction 1981
Delima enterprise was founded by Encik Zayed in conducted trading and supplying related product including manpower supplies to oil and gas industries.
2004
- Delima Enterprise incorporated as Delima Enterprise Sdn. Bhd.
- 2 principal shareholder and controlling directors : Encik Zayed and Puan Hashimah (Husband and wife)
2006
- Company submitted application for banking facilities and required company’s Audited Financial Statements for the last 2 years.
- There are so much mistake happened during the last two years founded by the auditor and Cik Amy (Finance Executive)
ANALYSIS
: Choose to develop in-house accounting system or outsourcing the system
EVIDENCE:
In survey 73% of company outsourced some or all of their information system and most outsourced to several companies to increase flexibility, foster competition and reduce cost
SOLUTION
: Outsourcing (purchase)the integrated system such as SAP software,UBS.
ANALYSIS
: Choose to implement manual or auto pre number document & record keeping.
EVIDENCE:
As for big company,SimeDarby Bhd they have a proper documentation with prenumbered system based on online & they has sort each task to a group of department or team such as procurement & finance
SOLUTION:
-Adopted auto pre numbered system
-Transaction properly record in the system.
LACK OF TRAINING
ISSUE
:
- Inadequate job training
- Does not spend on training of staff
- Decrease company performance as a whole
- Discredit the company reputation
ANALYSIS
: Theory of Constraints (TOC
- The theory says that every system, no matter how well it performs, has at least one constraint (weaknesses) that limits its performance.
- Apply this theory to manage constraint in enhance employee skill & performance.
EVIDENCE
: According to Goldratt, organizational performance is dictated by constraints.
These are restrictions that prevent an organization from maximizing its performance and reaching its goals
SOLUTION
: Spend more on training to equip employee with proper knowledge
Practice training like e-training, job rotation, mentoring programmes & seminar.
ANALYSIS:
Time Tracking Tools
-Time tracking is useful for company who wants to manage time better, become more productive and can track an employee’s work hours.
EVIDENCE:
In Malaysia, large company like PETRONAS used time tracking tools.
SOLUTION
:
-Use access card
-Use time clock machine or thumbprint.
-Supervise time in and out of the employees.
-Should hire an additional employee who can monitor the attendance and timesheet
ANALYSIS
With conventional budgeting the budgeted expenses for the forthcoming budget to support activities are normally based on previous year’s budget plus adjustment for inflation. Activity-based budgeting aims to manage costs more effectively by authorizing the supply only of those resources that are needed to perform activities required to meet the budget production and sales volume..
EVIDENCE
Many companies now prefer this method over other budgeting methods that are currently available because can determine amount of profit they will earn in every single activity like Munchy’s.
RECOMMENDATION
The company should prepare budget for their future activity so that they can control their financing. They can start with simple budget planning and can improve from time to time
FINDINGS
Withdrawal of company’s money made without proper documentation.
Decision and authorization made by the directors on its own without proper documentation.
Implication: Increase risk of fraud & inconsistency in performing task.
Giving difficulties to auditors to track the transaction and movement of asset
ANALYSIS
Concept of SOPs : Known as standard operating procedures, are documented practices designed to ensure consistency in business practices and operations.
Provides: detailed of work instruction, procedures & process (individuals & entire organization).
solution
Delima should implemented SOP in order to:
Increase efficiency and consistence in performing task
Indicate compliance in the entity requirements and can be used to train others
Issue: Lean Organization
FINDINGS:
-Organization chart was drawn with simple structure.
-Delima directors makes all major decisions and monitor all activities.
-Staff serves as an extension of the manager’s supervisory authority.
-Limitation : no departmental function, too few position add to the chart.
ANALYSIS:
-Concept of functional structure
-Definition: Consist of CEO & limited corporate staff, with functional line managers in dominant area (production, accounting, marketing, R&D, engineering, human resources).
Benefit: 1) Allow for functional specilization
2) Facilitate active sharing of knowledge within each functional area.
EXAMPLES:
Most of medium size company in Malaysia success in adopting functional organization structure .
SOLUTION
-Move from the simple organization structure to functional organization structure.
-CEO must verify that the decision & actions of individual business function promote to entire firm.
Sample of functional structure
Issue : Employees are Lack of Competency
ANALYSIS
- Concept of effective selection process.
FINDINGS
HOD lead by unqualified staff.
- Staff did not meet academic requirement & experience required by company.
- No EPF & Socso contribution.
- Lack of corporate governance among staff
- No segregation of duties
EXAMPLE
- Applied in most big company like Petronas, Konica Minolta, etc.
SOLUTION
- Practiced effective selection process.
- Provide job manual or job description to all position
Effective Selection Process
1) INITIAL
- Determine if basic qualification are met
- Devices: application form, background check
2) SUBSTANTIVE
- Test the qualification met than others
- Devices: written test, interview
3) CONTIGENT
- Final checks before hiring
- Eg: drug testing, any criminal involvement
4) RESULTS
- Accept & hiring success candidate
CONCLUSION 