...Table of content Introduction Description of business Justification of location Selection of appropriate labor Sources of fixed and working capital Role of the entrepreneur Type of production Levels of production Quality control measures Use of technology Linkages Potential for growth Government regulations Ethical issues Bibliography Introduction The SBA will be on the topic of production, the production will be a sole trader business which is a haberdashery. The SBA will have all answers required to the questions, so then it will give all information about the business. The research was properly done and will tell the establishments about the business also its description, location, selection of appropriate labor, fixed/working capital, role of entrepreneur, Type of production quality control measure, Use of technology, linkages, government regulations and ethical issues all revolving and pertaining to the establishment. Description of the business A haberdashery business will be established by the name of ‘Kash Haberdashery’. The manager of the soul trader business will be Mr. Campbell. The business will supply persons with sewing tools, cottons, towels, kitchen and bedroom sets etc. The objectives of ‘kash haberdashery’ will be to provide top of the line products from good sources, affordable. Best qualities and comfortable settings, affordable for all class. Justification of location ...
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...communication Monitoring), need to be implemented. This is done to not only protect the company from fraud and abuse but also be in accordance with the law. Upon the initial review of the LJB Company the company I have found that the company in general is doing various things well. An activity such as keeping the checks in a locked safe is a good security procedure. It limits access company funds and protects it from theft. Have pre numbered checks in my opinion company is a good procedure as well. I would recommend the purchase of the indelible ink machine used for the purpose of printing checks. Using the indelible ink machine applies to the internal control procedure of using physical control. Using that machine to print checks can undeniably help prevent fraud by someone forging someone else signature Unfortunately in my review of the company I have found activities that the company is participating in that violate standard regulated internal procedures. Giving all employees access to the petty cash is in violation of the establishment of responsibility internal control procedure. That leaves any employee the ability to use petty cash for any means. An accountant that is working for the company is currently the controller and the treasure. This activity violates the segregation of duties internal control procedure. There should be different individuals responsible for related duties. Having on individuals responsible for treasurer and controller could boost optional errors and...
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...Dear Sir, Thank you for taking the time to meet with me today and discuss your concerns with internal controls and security. Going public is a big step in the development of a corporation, and you will come under great scrutiny as to your security principles and internal control mechanisms. My colleague has informed me of several examples of how your business operates and I have prepared a few remarks and recommendations for you to address before going public. Before I delve into the heart of the matter, I would like to remind you of the objectives of internal control practices: first, to safeguard the assets of the corporation, improve the reliability of its accounting practices and records, increase the efficiency of the corporation's operations, and ensure that it's following laws and regulations. This can be achieved through the following general principles: 1. Establishment of Responsibility - Setting clear expectations of your employees and making sure 2. Segregation of Duties and Segregation of Record Keeping - Making sure that no single individual remains 'unchecked' by others in his or her activities, and that the same people responsible for certain actions are not also solely responsible for recording those actions. 3. Documentation of Procedures - making sure that the expense reports are accurate and that original receipts are used for proof. 4. Physical Controls - in order to safeguard property against theft and vandalism. Based on those principles...
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...Internal Control for LJB Company Written by: Elson De Lemos Addressed to: The President of LJB Company August 08, 2013 Introduction 3 Internal Control Requirement 3 What LJB is Doing Right 5 Things to Improve and Recommendations 6 Conclusion 9 References 10 Introduction Mr. President as you have indicated you want to be informed about any new regulations required of your company in case you go public. This document will give you an overview of the Sarbanes-Oxley Act, of 2002 (SOX) that your company will be required to implement if you go public. I'll give detailed recommendations and instructions how to implement internal control principles in your organization. There are some additional factors that will be mentioned below in greater detail including compliance, and business ethics in regards to Corporate Social Responsibility. Also you will find out that the report includes a general overview of internal control strategies LJB Company should give consideration to; in order to limit legal responsibility in ethical/legal matters that include; matters of fraud mitigation, document retention, control activities, information/communication factors, monitoring, and assessing risk (Kimmel, 2013, p. 338). I also will advise you in what your company is doing right and instruct you in what your organization needs to improve. Internal Control Requirement As you might know all public companies must comply with the Sarbanes-Oxley Act, which...
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...elevation of the internal control systems because of the company’s plan to go public. Because of this, I have gained access to information required to better service the company. The following are my findings and suggestions for adjustments. Facts/Findings The company should have separation of duties, in this case an accountant that deals as the Controller and Treasurer should not be dealing with more than one job to prevent fraud; since the accountant has been performing the purchases and pays for the supplies he has a greater chance to steal the products, or write himself a check. Another area that the company needs is proper authorization to better deal with petty cash and also to be able to purchase items with the petty cash only specific employees should be able to perform the purchases with petty cash and it should have the proper signatures from a manager. Another area that you can best use to prevent...
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... When reporting comprehensive income, it should be presented in two sections, net income and other comprehensive income. The financial statement should show the total amount for net income together with the components that make up net income, the total amount for other comprehensive income together with the components that make up other comprehensive income, and total comprehensive income (FASB ASC 220-10-45-1A). Some items of other comprehensive income includes foreign currency translation adjustments, gains and losses on foreign currency transactions that are designated as economic hedges of a net investment in a foreign entity, gains and losses on derivative instruments that are designated as cash flow hedges, and unrealized holding gains and losses on available for sale securities (FASB ASB 220-10-45-10A). One format shows other comprehensive income components shown net of tax effects. Alternatively, components of other comprehensive income could be presented before tax with one amount shown for the aggregate income tax...
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...|Internal Control and Accounting Systems (AQ2013) | |For use in the AAT Accounting Qualification | |A to Z Vehicle hire |Assessment book | Time allowed: Four months |AAT Level 4 Diploma in Accounting |QCF qual ref |SCQF qual ref |QCF unit ref |SCQF unit ref | |Internal Control and Accounting Systems |600/6892/9 |R324 04 |F/504/3353 |UD65 04 | |Notice to candidates | |All candidates must adhere to the terms and conditions specified for this assessment. | | | |Your report must be typed, completed and submitted for formal assessment within four months. Your assessment start date was recorded onto the assessment | |platform when you accepted the terms and conditions...
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...MAHARASHTRA STATE BOARD OF TECHNICAL EDUCATION (Autonomous) (ISO/IEC - 27001 - 2005 Certified) __________________________________________________________________________________________________ Subject Code: 0815 SUMMER – 13 EXAMINATION Model Answer Page No: 1/ 25 Important Instructions to examiners: 1) The answers should be examined by key words and not as word-to-word as given in the model answer scheme. 2) The model answer and the answer written by candidate may vary but the examiner may try to assess the understanding level of the candidate. 3) The language errors such as grammatical, spelling errors should not be given more Importance (Not applicable for subject English and Communication Skills). 4) While assessing figures, examiner may give credit for principal components indicated in the figure. The figures drawn by candidate and model answer may vary. The examiner may give credit for any equivalent figure drawn. 5) Credits may be given step wise for numerical problems. In some cases, the assumed constant values may vary and there may be some difference in the candidate’s answers and model answer. 6) In case of some questions credit may be given by judgement on part of examiner of relevant answer based on candidate’s understanding. 7) For programming language papers, credit may be given to any other program based on equivalent concept. MAHARASHTRA STATE BOARD OF TECHNICAL EDUCATION (Autonomous) (ISO/IEC - 27001 - 2005 Certified) __________...
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...Mike Wilson Xiaotang Wang 11/23/15 Segregation of Duties Segregation of duties is often referred to as the most effective form of internal control. Unfortunately, especially for small business, it can also be the most expensive form of internal control due to the necessity of increased work force. Segregation of duties (SOD), also known as separation of duties, falls under the framework’s control activities component created by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to the definition of COSO, segregation of duties is “Dividing or allocating tasks among various individuals making it possible to reduce the risks of error and fraud.”. Segregation of duties is to ensure that a single individual will be responsible for only one component. One of the benefits of maintaining separated duties is that it reduces the risks of fraud in the business. Other benefits are safeguarding the assets, making the financial reports fairly presented, and reducing the cost of external audit. Four functions are commonly segregated in practice. They are custody, authorization, record keeping and reconciliation. We intend to describe these functions in detail, provide examples of each control, and a real world example of what can happen when these functions are not separated. Authorization is described as, “the basis by which the authority to complete the various stages of a transaction is delegated” by the University of Washington. Authorization...
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...company will have the resources to pay its current and maturing obligations. Since the company has no long-term debt, it has more resources to pay obligations. A disadvantage is that if the company has no long-term debt, it does not have any long-term investments. When a company invests in securities, such as bonds, common stock, or long-term notes, the company is anticipating its long-term life. For example, bonds are a long term debt that are cashable at a certain point in time; if a company has bonds, the company will have expected cash in the future. b) What are some advantages to Chieftain from having this large cash balance? What is the disadvantage? b. One of the advantages is that the company has a high liquidity, and does not necessarily need to pay on account when pursuing transactions. Having a large cash balance indicates that the company has the ability to handle more cash transactions than a company that does not. It also indicates that the company is financially flexible, since it has the ability to take effective actions to alter the amounts and timing of cash flows so it can respond to unexpected needs and opportunities. A disadvantage of having a big cash balance is that the company does not get many things on account, and could mean...
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...1 7 p a da y. Accoun t ing ( 513 Essays) Econom ics (1,080 Essays) Fina nce ( 1, 083 Essays) H um a n Re sour ce M a na ge m e nt ( 1,012 Essays) M a na ge m e nt St udie s ( 1, 723 Essays) - I n t e r n a t ion a l Fin a n cia l R.J. Rey nolds I nt er nat ional Financing ( HBS 9- 287- 057) The case is set in t he cont ext of RJR’s 1985 financing of it s $4.9 billion acquisit ion of Nabisco Brands I nc. To finance t he acquisit ion, RJR was pr oposing t he issue of $1.2 billion of 12 year not es and t he sam e am ount in pr efer r ed st ock . I t had alr eady funded $1.5 billion of t he acquisit ion leav ing $1 billion m or e t o finance. Challenges facing RJR: Of t he $1.5 billion t hat had been funded, $500 m illion cam e from cash and t he r em aining was t hr ough bank bor r owings and com m er cial paper. These borrow ings added t o t he debt t hat RJR had issued in 1984 and br ought t heir debt rat ings dow n t o A. The r em aining $1 billion financing w ould hav e t o k eep t his in m ind as w ell as t he $1.2 billion of 12 - y ear not es t o be funded. To det erm ine t he financing, w e need t o consider t he following choices: Debt vs. Equit y : RJR is a m at ur e com...
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...Transaction Exposure When conducting business aboard, cash inflows are affected when a variety of currencies are involved. In the case of Nike’s proposal to expand in India, there are ways to migrate exchange rate risks by exposing the possible risks before they affect the company’s profit margin. One method is the transaction exposure. Transaction exposure is the degree to which the value of future cash transactions that are affected by exchange rate fluctuations. According to Madura, “Transaction exposure can have a substantial impact on a firm’s earnings. It is not unusual for a currency to change by as much as 10 percent in a given year. If an exporter denominates its exports in a foreign currency, a 10 percent decline in that currency will reduce the dollar value of its receivables by 10 percent. This effect could possibly eliminate any profits from exporting” (Thomson South-Western 2006). To assess transaction exposure, Nike will need to estimate its net cash flows in each currency and measure the potential impact of the currency exposure. According to Madura, “To measure its transaction exposure, an MNC needs to project the consolidated net amount in currency inflows or outflows for all its subsidiaries, categorized by currency….Estimating the consolidated net cash flows per currency is a useful first step when assessing an MNC’s exposure because it helps to determine the MNC’s overall position in each currency” (Thomson South-Western 2006). The standard deviation...
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...example using pre numbered invoices, reconciling its bank statements, locking payroll checks up over the weekend, and having two people to interview and approve all new hires. Also the accountants want to purchase an indelible ink machine to print checks is a good idea. I would also suggest that they’re printed on carbon paper, so that the second copy can be submitted to the accountant for verification purposes. I did find some areas where LBJ Company should be concerned. The largest of those concerns are the accountant serving as both the treasurer and controller. This should really be two separate activities. If there were a problem with the money no one would have no way of knowing since one person handles all activities associated with the cash are done by the accountant. The accountant really should handle all the record keeping and reconciling the bank statement and the treasurer issuing money. This way no money is issued without the accountant being aware. The purchasing of supplies should also be broken up into a two part process. One person to decide what needs to be ordered and then submit the order to a second person for approval. The next area of concern is the paychecks being left out for employee...
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...Customer Service: Providing quality products and customer service are our top priority. We continue to go the extra mile for customer satisfaction. Respect: For us to remain successful we must give and receive respect that is free of harassment and discrimination, so we are all proud to say we are a part of Bob's Hardware team. Goals of the Project: Bob’s Hardware Store uses regular cash registers to ring up their transactions, but would like to move up to using POS so they can also accept credit and debit cards, which will increase their customers. The IT team needs to develop a program so that the store can use POS. This will help make the accounting process easier. Another objective to the POS is to reduce the amount of time it takes to process customer purchases, such as the ability to use credit cards and other forms of payment, keeping track of sales, and generating supply orders. The POS can be linked in to employees bank accounts, which will help with payroll. The POS will be also run through their computer system which will help Bob and his wife to keep better track of cash flow and profit margins. The above objectives will help to reduce the amount of time needed for the many daunting accounting functions, reduce errors occurring during transactions, and increase customer satisfaction. The methodology I am suggesting is Agile, which will allow any new ideas or plans to be introduced, and testing will be easier. This is going to make meeting the goals and mission...
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...A budget is a quantitative expression of the money inflows and outflows that reveal whether a financial plan will meet the organisational objectives or as a quantitative plan of action relating to a given period of time which may include planned revenues, expenses, assets, liabilities and cashflows. Business budgeting is one of the most powerful financial tools available to any small-business owner. Put simply, maintaining a good short- and long-range financial plan enables you to control your cash flow instead of having it control you. Budgeting is a quantitative expression of a plan or action prepared in advance of the period to which it is related. Budget sets out the costs and revenues that are expected to be incurred or earned in future period. Budgeting is one of the most important skills that you can have. In any economic forecast, planning and budgeting are crucial when it comes to conserving and increasing your resources. The use of a budget can be helpful to not only individuals and families, but companies as well. In order to stay afloat, every company from the small business to the large corporation must keep track of their finances in order to succeed. Often they utilize the services of an accounting professional to keep this information in order. However if you are the owner of a small business or simply trying to deal with your home finances, you may not have the luxury of hiring a professional and need to do the work on your...
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