Using the case study on the succeeding page , do the following:
- Develop methodologies with the aim of establishing the integrity of financial records
1 Prepares accounting records by adopting a particular or we can say appropriate standards.
2 All the cheques which are issued and collected double click on them. Monitor a double entry book keeping each transaction that are incurred by the company.
3 Data Control System is required to control all the internal departments just to ensure checks and balances.
4 Each bank statements must checked properly and must compared with every receipt and payment with bank reconciliation statement that incurred every month.
5 Re-Check carefully all the cheques issued by the Pico-Zen Chen company ltd.
- Explain how the methodologies developed be implemented.
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Methodologies development is implemented in pifco-zen-chen company limited to eliminate the irregularities and to produce an appropriate financial records of the company. This is initiated by CEO going to the 3 levels of management .i.e. top, middle and bottom levels, management to participated by all the employees in the accounting, supply and cashier depth. It should be well monitored and cross checked by an external and internal audit. Must create a fun environment by organizing some kind of functions or trivia nights.
- Identify the errors and irregularities in the recording, classification and summarising of financial transactions made by three executives in picot Zen Chen company limited.
1 Wrong entry of overvalued inventory amount $25 million.
2 A long term amounting to $9 million un-updated for payment.
3 The bank reconciliation statement provided by the company which is included incorrect calculation.
4 receipt of bouncing cheques up to $3 million.
5 A short term debt on the books of account $65million but actual amount was $55 million incorrectly recorded.
6 Bank overdraft loan borrowed by the company which should reflect an $85 million and not $75 million.
7 Not inclusion of the amount of purchased supplies made by the sales nd making manager amounting to $15 million.
- RECOMMEND A CORRECTIVE ACTION WITH REGARDS TO THE ERRORS VAND IRREGULARITIES FOUND IN THE FINANCIAL TRANSACTIONS OF PIFCO ZEN CHEN COMPANY LIMITED.
1 All business transactions should be recorded properly either its big or small transactions.
2 Proper documentation must be made for all the cheques and cash that was disbursed in every transaction and make a proper entry of data into the data sheet.
3 All financial documents and data must be updated in every purchase and the income incurred whether it be at small or big amount.
4 Have integrity in data and be transparent and entry of every transaction of the company.
5 Make a proper identification of the current or prepaid expenditures of the company incurred during every transaction.
6 Proper recording of all the transactions should be made for all the small and big amount.
7 The correct, fair and true view of statements in the financial report and meeting should be delivered by the person in charge whether he or she may be sales manager/ finance manager/risk manager for the board to know the true standing of the company.
8 The service of external will help to find out irregularities and eventually eliminate it.
2.1 Record in dollar terms and review the operating efficiencies of Pifco-Zen chen company limited.
Operating efficiency US$
Net Fixed Assets 4
Investment in Subsidiaries 30
Current Assets US$ (million)
Stocks 125(-25) 100
Debtors 90(-9) 81
Prepaid Expenses 40(-7) 33
Bank Deposit(7day call
Account) 60(-3) 57
Cash at Banks 30 30
Petty Cash 1 1
Always on Time
Marked to Standard
Accured Expenses 30
Short Term Debt 55(+10) 65
Overdraft Balance 75(+10) 85
` 205 232
Net current Asset($346-$205) 141
Total Net Assets
Long Term Debts 80
Assumed Profit Until 1975 46( 25)
2.2 FROM THE END BALANCES SHOWN FROM THE BALANCES SHEET AND ADDITIONAL TRAMSACTIONS STATED IN THE PRECEEDING PARAGRAPH,DETERMINE IF ORGANIZATIONAL FINANCIAL POLICIES AND PROCEDURE OF PIFCO-ZEN CHEN COMPANY IS OBSERVED.
False recording done by three executives:
1 False recording of accounts done by three executives.
Coy didn’t follow appropriate policy and accounting standards needed to formulate complete, reliable and usable financial statements.
2 The act of manipulation of accounts stated that they didn’t practice GAAP that should be followed by every entries to formulate financial reports that can be provide fair and true view of the financial data to its users
2.3Make a report which identifies the strengths and weaknesses of the company and includes recommendations for improvement.
1 Identify problems and take corrective actions.
2 Marketing strategy and sales strategy is very good.
3 Product innovative
4 The confidence of three executives to service for a long years even the changing state of economy.
1 Dishonest managers
2 lack of transparent due to poor information control system.
3 wrong accounting principles and internal auditors.
4 Incompetent external and internal auditors.
1 Define Your Goals:Determine your measures for success. Make your goals challenging, but achievable. Do you want to increase customer retention, improve market share, penetrate a new market segment, change a perception, generate more store traffic, reduce customer complaints? Be specific and make your objectives measurable. For example, by what percentage do you want to increase sales?.
2 Develop Methods to Collect and Organize Data:Determine a process for tracking and reporting all relevant data. Report on trends that emerge from your findings on a regular basis..
3 Understand Your Strengths and Weaknesses:Rate your company on your developed list of metrics in comparison to your competitors. Look for clusters of strength that may give you a competitive advantage.
4Measure Marketing Effectiveness:Effective measurement lays the groundwork for future plans, so keeping track of results is the only way to improve your marketing efforts. The key is determining which data should be collected. Your marketing results may be measured in sales (dollars or units), market share, store traffic, number of inquiries or reduced complaint rates, or other metrics. Tracking can also be based on surveys that assess customer perceptions