...Controls for Inflows Christina Hall, Prez Palmer, Pamela Poyser, Halle Rodriguez Internal Control Systems-ACC 544 June 27, 2011 Professor Michael Meyer Controls for Inflows Internal controls are important in the business process. There are risks in the business process that can be a detriment to the company and internal controls help to minimize those risks. The most common risk is fraud. With the establishment of internal controls, the users of the financial statements are confident in trusting the data that’s included in the financial statements. The paper will show what controls a company should implement in cash, sales, accounts receivable, inventory, and publication. Internal Controls for Cash Historically, cash has been the primary target of employee fraud thus, carrying the highest risk. A company should focus internal controls on cash first, before any other segment. Cash is a liquid asset, making it easy for thieves to put it in their pocket and leave without any traceability. To avoid theft of cash, a good control system has two or more people handle the cash from customers, endorse checks immediately after receiving, make lists of cash receipts right away, and separate the cash from the bookkeeping documents (Louwers, Ramsay, & Strawser, 2011). Companies should make bank deposits daily, leaving no money withheld from the deposit. When processing cash receipts, employees should follow company policies and procedures laid-out for them at time...
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...Proposal of Controls for Inflows Every company needs an adequate internal control system to minimize the risk of errors in the company’s accounting figures, attempts of fraud, and to ensure that the company abides to their production and managerial policies and procedures. Promoting employee efficiency remains important and helps keep investors apprised of the operations within the company and ensures they understand the company’s financial standing with regard to the integrity of its internal control system. Following is a proposal depicting a design of the internal controls for the inflows of a company that include cash, sales, accounts receivable, inventory, and production. Cash Key areas for the design of cash controls include: • Cash Security • Acknowledgement of Cash Receipts • Separation of duties • Review and Reconciliation Cash or cash equivalents are the most liquid asset a company owns. Cash is easy to transfer and not uniquely identifiable. Proper internal controls are crucial for inflows of cash, as cash is harder to trace. Cash Security proves the most important. Cash should remain in a secure location at all times whether in a safe, vault, or locked drawer or file cabinet. If combinations are used to secure cash, they should be changed frequently. Performing the proper background checks on perspective cash handlers remains a simple and effective method to control cash. Access to cash should remain limited and an access log should be kept for tracking...
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...EXPERIMENT B Aim : To study level control using 1 – Element (Level) Single Loop PID. Control System : It consists of the following in feedback. LT11 - Level LIC11 - Loop 1, PID 1, of LIC/FIC11 LCY11, LCV11 - Control Valve at Inflow Pipe Special Remarks : LIC/FIC11 is in the 1 – Element position with Loop 1 in A mode. Procedures : 1. Pump P13 was switched OFF as there is no necessity to operate the product flow system. The heater was also turned OFF as there is no necessity for heating. 2. A final check was done to ensure that the instrument air supply was 25 psig (1.7 Barg), the overflow drain valve and the vent at tank T11 were opened. 3. Tank 12 was filled with water till its level reached the over-flow drain pipe outlet (D). 4. The main power supply switch at the Electrical Cubicle was turned ON. The control panel instrument lid up. 5. All controllers were set to Manual (Mode). The output (MV) of LIC11 was manually adjusted to about 55%. The output of TIC11 was manually adjusted to about 50%. The stem position was visually checked to ensure it is at the position of about 50%, with the positioner PP controlling. 6. Pump P12 was started and it was verified that the pump is pumping. The by-pass valve was shut and the rise of water in tank T11 was observed from the sight glass. 7. Pump P11 was started after the water level in tank T11 was about 50%. P11 was verified to be pumping through the heat exchanger...
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...Case: Capital Controls in Chile in the 1990s (A) Name Course Date Institution Why did Chile institute capital controls in 1991? Despite the impressive economic performance by Chile in the 1990’s, dramatic changes in the external environment call for a review of its capital controls. For instance, in 1991 the country instituted the “encaje” to control excessive speculative capital inflows. In addition, these controls would help the country efficiently manage her exchange rate regime and pursue an autonomous monetary policy. Due to the low prevailing global interest rates at the time, excess capital inflows exposed the Central Bank's capacity to manage the exchange rate within acceptable margins. Indeed, if the influx continued, Chile's inflation would drastically rise to unmanageable levels (Alfaro & Tella, 2007). Before the 1997 Asian financial crunch and the Russian debt crisis of 1998, the Chilean economy had thrived despite these controls. However, in the aftermath of these crises, the country suffered both trade and financial deficits. For instance, since Asia nations served as her important export destination, Chile’s current account deteriorated massively. Moreover, the declining price of cooper saw a plummeting of foreign exchange due to dwindling demand from traditional export markets. Certainly, these unpredictable changes in the dynamic economic environment force Chile to reassess its capital control strategies (Alfaro & Tella, 2007). Did...
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...investment Foreign direct investment is a foreign investment that establishes a lasting interest in or effective management control over an enterprise. Foreign direct investment can include buying shares of an enterprise in another country, reinvesting earnings of a foreign- owned enterprise in the country where it is located, and parent firms extending loans to their foreign affiliates. International monetary fund (IMF) guidelines consider an investment to be a foreign direct investment if it accounts for at least 10 percent of the foreign firm's voting stock of shares. However, many countries set a higher threshold because 10 percent is often not enough to establish effective management control of a company or demonstrate an investor's lasting interest. Entities making direct investments typically have a significant degree of influence and control over the company into which the investment is made. Open economies with skilled workforces and good growth prospects tend to attract larger amounts of foreign direct investment than closed, highly regulated economies. FDI is the sum of equity capital, other long-term capital, and short-term capital as shown the balance of payments. FDI usually involves participation in management, joint-venture, transfer of technology and expertise. There are two types of FDI: inward and outward, resulting in a net FDI inflow (positive or negative) and "stock of foreign direct investment", which is the cumulative number for a given period. Direct investment...
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...2008, several orthodoxies - such as efficient markets, inflation targeting and central bank independence - are being reviewed. Even the International Monetary Fund (IMF) and the World Bank have revised their views and conceded that capital controls may be necessary at times. However, for the ideologically blinkered in India, capital account controls in any form are synonymous with "licence and permit raj". Given the size of India's outstanding stock of internal public debt and projected budget deficits, there are limitations to which the government/public sector can access funds domestically. This would suggest that India should welcome all forms of capital inflows to plug its funding gaps. However, if foreign capital flows into India are more than its current account deficit, the excess gets added to its forex (FX) reserves, which are warehoused in low interest rate bearing government securities of triple A developed countries. The governor of the Reserve Bank of India (RBI) mentioned at a conference in Zurich on May 11, 2010 that "problems arise when the (capital) flows are largely in excess of the economy's absorptive capacity". This article examines available options and corresponding logic to increase or restrict capital inflows against the irony of India having to lend its FX reserves to governments of countries with much higher per capita income. First, a few numbers. As of December 31, 2009, India's FX reserves stood at $283.5 billion. On the same date, total external...
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...additions that are the most important. In respect to the important additions there are also important subtractions as well and those subtractions are the currency exchange rate difference and deferred taxes. The working capital analysis showed that there was a significant increase in the inventory, receivables, and tax payables. The working capital also showed that the Candela Corporation’s payable accounts, warranty costs, and other company assets decreased at a small margin. There was a gross outflow of cash that was a result from the adjustments of the working capital and it caused the outflow of cash to be in the operating activities. As it pertains to the financing activities, the Candela Corporation tried to bring their outflow under control by borrowing small debt and using share issue but because of commitments the company had already made, it had to pay back the company’s existing debt and buy the stock back. Because of this the company had an outflow of cash again, but this time with financing activities. As it pertains to investing activities, the purchases of fixed assets were the only item and that caused an outflow in investing activities. Because the results of the investing, financing, and operating activities are negative; the Candela Corporation had a net cash outflow. 2003 The Candela Corporation had a net profit of $ 6,814,000. The foreign exchange rate difference, notional interest on stock warrants, and discounted operations were...
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...discontinued operations and interest on stock warrants; the two most important subtractions were due to the deferred taxes and foreign currency exchange rate difference. The analysis of working capital showed that: * Receivables, inventory and tax payable increased by a significant amount. * Warranty costs, payables and other assets decreased, but by a lower margin. This shows that the working capital adjustments resulted in a gross outflow of cash which causes the cash outflow in the form of operating activities. In the investing activities, it is shows the only item and that is the purchase of fixed assets, which causes an outflow in terms of investing activities. In financing activities, the overall outflow was to be brought under control by means of share issue and borrowing modest debt, but due to previous commitments, the company had to buy back stock and also repay its existing debt. This caused another outflow of cash in financing activities. Since the results of operating, investing and financing activities were negative; this caused a net cash outflow from the business. Since the...
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...1. Compared with the present fee structure, the new membership plan and fee structure certainly will help improving CRC’s ability to plan its cash receipt. Under the present fee scheme, revenue is generated from both membership fees and hourly court fees. However, membership fees just accounts for a comparatively small proportion of income of the entity, whilst hourly court fees is main source of its income. Due to the variable rates on different seasons, peak and off-peak seasons, and accordingly different estimated court usage in those times, it will be quite difficult for CRC to predict its future cash receipts. Although the facts that most of current membership will expire on September and the peak season for racquetball normally starts from September indicates that there will be a substantial amount of cash receipts during the early part of the peak season because of the renewal of the annual membership fees and heavy court usage, it still will be hard for CRC to estimate its cash receipts during the summer. However, in terms of the new membership scheme, membership fees will be the only source of revenue for CRC. Besides, the original three categories of members (individual, student and family) will be reduced to two categories (individual and family). Therefore, it will be easier for CRC to plan its cash receipts since there will be less uncertain factors that have influence on the entity’s cash receipts. To be more precise, as the membership fees will be collected...
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...Mark Stone Contents Introduction: 4 The Required Equipments : 4 Maintenance : 6 The Total Cost involved In The Creation The System : 8 Workflow Diagram : 9 Conclusion : 10 References : 11 Introduction: During dinner my sister talked about how she was frustrated with having to manually tack and reorder high demand items. She asked me if I could help her with an automated system, but has a very small budget. These days particularly in the past 10 years, even many smaller businesses have understood that computerized inventory management systems are very useful, accurate and make their jobs much easier than doing the same things manually. Inventory control is important to assure control in businesses that handle transactions revolving around consumer goods. The inventory control system must be able to warn the vendor when one of the items in the store is going to be out of stock soon and make the person who handles this kind of thing reorder (if it is a good system of course), otherwise maybe one day some important items can be out of stock, affecting the business negatively. Simply saying “we don't have that stuff right now”, is somewhat less than fully professional. The Required Equipments : Inventory management technology is a mix of hardware and software designed to add reliability to inventory accounting, reduce incidents of theft and facilitate inventory audits. Individual inventory items or batches of items could be equipped with RFID...
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... Venezuela GDP Growth Rate (http://www.tradingeconomics.com/venezuela/gdp-growth) The Gross Domestic Product (GDP) in Venezuela contracted 0.00 percent in the third quarter of 2010 over the previous quarter. Historically, from 1997 until 2010, Venezuela's average quarterly GDP Growth was 0.69 percent reaching an historical high of 22.70 percent in June of 2003 and a record low of -15.30 percent in March of 2003. Venezuela is the fifth largest national economy in Latin America. Venezuela is highly dependent on oil revenues, which account for roughly 90% of export earnings, about 50% of the federal budget revenues, and around 30% of GDP. In recent years, President Hugo Chavez has been systematically increasing the government's control of the economy by nationalizing firms in the cement, steel, petroleum, communications, and electricity sectors. This page...
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...resistance from entrenched ideologies and interests in the U.S, the U.K, and the IMF prevented the reforms and rearrangements in the international financial system from happening. ➢ The East Asian crisis---the severest jolt to the world economy since the Oil Shock in early 1980s. ➢ Asian Crisis ---spread from Thailand to Indonesia, the Philippines, Malaysia and Korea. Sequences---Export decline ( loss of investors’ confidence( Currency devaluation due to lack of foreign reserve( IMF emergency fund requiring tight budget and monetary policy( increase in non-performing loans and damage in domestic industries ➢ Drastic increase in international private capital inflow in the ‘90s was key to understand this crisis. Liberalization within a flawed policy framework ➢ Inadequate regulation to cope with capital inflow---lack of experience and expertise, the predominance of short-term debt (which made economies vulnerable to speculative attack), newly-licensed banks (with risky lending practices, and unproductive, speculative investments. ➢ Fixed...
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...Rupee Depreciation: Probable Causes and Outlook The Indian Rupee has depreciated significantly against the US Dollar marking a new risk for Indian economy. Till the beginning of the financial year (Apr 11-Mar 12) very few had expected Rupee to depreciate with most hinting towards either appreciation or status quo in the rupee levels. Those few who had even anticipated may not have imagined the scale of depreciation with rupee touching a new low of around Rs 54 to the US Dollar. What is even more interesting to note is that when other countries are trying to play currency wars and trying to keep their currencies devalued, India is trying to prevent depreciation of the currency. (Read our previous report for a review of the situation- Saying No To Currency Wars (20-Sep-11)) This paper reviews the probable reasons for this depreciation of the rupee and the outlook for the same. It also reflects on the policy options to help prevent the depreciation of the Rupee I. Economics of Currency Predicting currency movements is perhaps one of the hardest exercises in economics as it has many variables affecting the market movement. However, over a longer term currency movement is determined by following factors: Balance of Payments: It is the sum of current account and capital account of a country and is an external account of a country with other countries. Both current account and capital account play a role in determining the movement of the currency: o Current Account Surplus/Deficit:...
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...Financial Analysis – Horizontal Power Statement of comprehensive income Key items | 2009 | 2010 | 2011 | 2012 | Revenue ($000) | 189,381 | 239,682 | 267,284 | 289,000 | Profit before income tax ($000) | (60,596) | 33,308 | 56,277 | 45,575 | Total comprehensive income for the year ($000) | (42,391) | 25,564 | 40,472 | 33,472 | Note: 1. “Profit before income tax” and “Total comprehensive income for the year” dipped from 2011 to 2012 despite continued revenue growth from 2011 to 2012. (due to increase in costs -- potentially calls for measures in cost-control) 2. Revenue increase, though stable, shows signs of slowing down (rate of increase dropped from 11.52% (2010-2011) to 8.12% (2011-2012) 3. (Source: Annual Report 2009_2010) 2010-2011 (Source: Financial Report 2010_2011) 2011-2012 (Source: Financial Report 2011-2012) Statement of Financial Position Key items | 2009 | 2010 | 2011 | 2012 | Total Assets ($’000) | 813,930 | 1,040,841 | 1,202,623 | 1,306,760 | Total Liability ($’000) | 685,099 | 885,413 | 941,944 | 1,006,767 | Total Equity ($’000) | 128,831 | 155,428 | 260,679 | 299,993 | Property, plant and equipment ($’000) | 711,841 | 956,862 | 1,066,472 | 1,162,318 | Note: 1. Total Equity increased from 2009 to 2012, indicating that during the period, assets increased more than liability—a positive sign for the company. 2. For a utility company like Horizon Power, its non-current assets (in particular...
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...of private foreign investment. The wave of liberalization and globalization sweeping across the world has opened many national markets for international business. It is stated that FDI has to play a novel role in the world economy. The role of FDI has now transformed from a tool to solve the financial crises to a modernizing force. In past liberalization regime India has experienced tremendous growth in FDI inflows from an average of US $5-6 billion during previous five years; it has crossed the level of US $30 billion. But it still receives far less FDI flows than China and the USA or much smaller economies in Asia like Hongkong and Singapore in terms of GDP or Gross Fixed Investment. IT is not surprising, As India’s growth strategies have been reliant primarily on domestic enterprises; Mindset has changed during last decades only. Foreign Direct Investment (FDI) has grown dramatically as a major form of international capital transfer over the past decade. Between 1980 and 1990, world flows of FDI-defined as cross-border expenditures to acquire or expand corporate control of productive assets-have approximately tripled. Foreign direct Investment (FDI) has made a dynamic surge into the world...
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