Internal Controls and Accounting Systems Malcolm Green MAAT TEP FInstSMM Chairperson AAT Birmingham branch.

Transcription

1 Internal Controls and Accounting Systems Malcolm Green MAAT TEP FInstSMM Chairperson AAT Birmingham branch

2 Aims and Objectives To understand the learning outcomes and assessment criteria To know what makes a good report To give ideas for a project theme

3 The ICAS Project Report - Style Written formal report in the third person context in business English to management Based on workplace or AAT case study Structured layout with numbered sections and paragraphs abbreviations only to be used after the full word has been used Cross referenced to mapping criteria

4 The ICAS Project Report 4,000 WORDS(+/-10%)

5 Eat The Elephant

6 Eat The Elephant

7 What does 4,000 words look like? One sentence contains an average of 11 words and one A4 sheet contains an average of 32 to 35 sentences. An A4 sheet has an average of 350 to 400 words. Around 10 pages for just content 15 pages+ in report format with section headings etc

8 AAT - ICAS Report Quick Start Guide Total Word Count? Excluding any Appendices

9 Internal Controls and Accounting System 1. Report - Full coverage of Unit 2. Mapping of all evidence

10 ICAS - Assessment Criteria Principles of Internal Controls 3 Credits 40% Evaluating the accounting system 4 Credits 60% One credit = 10 hours of notional study 70 hours +/- work required Considerably less possible with a focused PUSH! Sooner YOU start the sooner YOU finish

11 Principles of Internal Controls (Knowledge) 1. Demonstrate an Understanding of the role of accounting within the organisation (5AC) 2. Understand the Importance and use of internal control systems (4AC) 3. Be able to identify and use the appropriate accounting systems to meet specific organisational requirements (4AC)

12 Evaluating the Accounting system (Skills) 1. Evaluate the accounting system and identify areas for improvement (5AC) 2. Make recommendation to improve the accounting system (4AC)

13 SMART- Project Planning Specific Title, theme and terms of reference Measurable- Reviewing systems and processes Achievable Implementation of recommendations Realistic Benefit for the organisation ROI/CBA Time bound ICAS Project Time Management

14 ICAS Time Management Planning and background reading Researching testing and monitoring systems Completing and collating findings Writing the first draft Checking and re drafting Final report numbering and mapping

15 Identifying a Project Theme Problem areas in the work place Customer complaints What could be improved? Discussions with past students Discuss ideas with a mentor or other colleagues What would you do if you were the manager?

16 Starting point ideas: Identifying a Project Theme Improvements to the cash flow of XYZ organisation Methods to optimise use and reduce levels of inventory holdings in a manufacturing company Recommendations for the computerisation of a payroll department Recommendations to move from HMRC payroll support to a commercial software package Recommendations to move from weekly pay to monthly pay following the introduction of Real Time Information (RTI) Improvements to company documentation to aid customer satisfaction Writing security procedures for protection against fraud for a large organisation Reviewing working methods in a local council cash office Reviewing the benefits of switching or upgrading existing accounts software package Recommendations to reduce the debtor collection day average Recommendation to move to online filing of tax returns

17 Getting Started To produce a good report requires Effort Content must be: Clear, Concise and Accurate! Convey an image of Total Professionalism Great effort goes into the Preparatory Work BUT the Look of the document should not be forgotten

18 Report Writing Tools Make use of what Microsoft Word has to offer: Spell check and Grammar check (UK) Thesaurus Report Templates Justify text to ensure a consistent look throughout Check size, font style and headings are consistent Get the help of a prof reader

19 Grammar Check-what s wrong? I met the Managing Director at Heathrow Airport where he showed me the Hose Jettison Unit. Later we walked over the Waterloo Bridge and bumped into the archbishop of Canterbury and the Chancellor of the Exchequer, who had just raised Income Tax in the Budget

20 Grammar Check- Corrected I met the managing director at Heathrow airport where he showed me the hose jettison unit. Later we walked over the Waterloo bridge and bumped into the Archbishop of Canterbury and the chancellor of the exchequer, who had just raised income tax in the Budget

21 Grammar Check- Corrected I met the managing director at Heathrow airport where he showed me the hose jettison unit. Later we walked over the Waterloo bridge and bumped into the Archbishop of Canterbury and the chancellor of the exchequer, who had just raised income tax in the Budget

22 Pa Additional Info And Further Moreover Again Next What s more Also In addition Equally important Word Bank: Connections Between Paragraphs Signposts/Cues for the Reader Conclusion Therefore Thus In conclusion Consequently On the whole As a result Hence In brief Details/ Emphasis In fact For example For instance To illustrate Indeed In other words In short Obviously That is Contrast However But Although Nonetheless In contrast Meanwhile Yet On the other hand Conversely Chronology Soon Afterwards Finally Then Previously Formerly Next Immediately

23 Layout of the report Title Page Executive Summary Terms of Reference Methodology Introduction Review of System Weaknesses Recommendations for Improvement Cost Benefit Analysis Appendices

24 Report Numbering Structure An example: decimal notation system 1. Introduction (Heading first main section) 1.1 (Second order heading) (Third order heading) 1.2 (Second order heading) (Third order heading) 2. Methodology (Heading second main section) 2.1 (Second order heading) (Third order heading)

25 References It is important that you give precise details of all the work by other authors which has been referred to within the report. Details should include : author s name and initials date of publication title of the book, paper or journal publisher place of publication page numbers details of the journal volume in which the article has appeared. References should be listed in alphabetical order of the authors' names. Make sure that your references are accurate and comprehensive.

26 Appendices Appendices not counted in your word count They allow you to add supporting information to your report. You can attach spreadsheets, questionnaires, tables, charts anything that will support the content of your report Appendices are usually numbered using Roman Numerals select the font style Times New Roman Appendix I Appendix II Appendix III Appendix IV

27 What to include The following areas must be covered in the review: Record keeping systems the purpose of financial reports, and the suitability of the organisation s current reports to meet organisational needs Internal systems of control identify how internal control supports the accounting system and the types of internal control in place, and any controls that are missing

28 Working methods/practices including the use of appropriate computer software, and the operating methods in terms of reliability, speed and cost effectiveness Training What to include Identify how training is or not used to support staff

29 Weaknesses Identify weaknesses What to include Potential areas for errors and fraud Time, money and reputational risk Impact upon the organisation Wasting resources, loss of revenue and customer expectations

30 SWOT Analysis Strengths Weaknesses Opportunities Threats

31 SWOT Analysis Indentify what the organisation is good at Identify a weakness in the organisation What are the opportunities available to the organisation Impact /Threat upon the organisation

32 Weaknesses What to include Fraud Definition 1. deliberate deception, trickery, or cheating intended to gain an advantage 2. an act or instance of such deception 3. something false or spurious his explanation was a fraud 4. Informal a person who acts in a false or deceitful way [from Old French fraude, from Latin fraus deception] Collins English Dictionary Complete and Unabridged HarperCollins Publishers 1991, 1994, 1998, 2000, 2003

33 Weaknesses What to include Causes of fraud, common types of fraud, methods used to detect fraud and potential areas for fraud within the organisation. Examples: Falsely claiming to be off sick Getting a friend to clock on and off for you Claiming for overtime not worked Claiming for expenses not incurred Claiming for time/work not done/completed Fictitious employees Fictitious invoices/receipts Theft of inventory/stock /materials Theft of cash from tills/petty cash/vending machines

34 What to include Recommendations for improvement For every weakness identified there should be a recommendation The effect that the changes have on the organisation The effect that the changes have on staff and any training that will be needed

35 What to include At least one recommendation made should have a Cost Benefit Analysis (CBA)

36 Cost Benefit Analysis (CBA) Not all benefits are quantifiable all costs are Assumptions or guesstimates allocate costs to time unknown salaries or any other unknown expense All benefits should be identified including those which cannot be allocated a financial figure

37 ICAS - Competent or Not Yet Competent You have up to five submissions to get it RIGHT! Average is around 2/3 Common Problem Areas for NYC Report not laid out correctly and numbered CBA not realistic and lack of monetary values ( ) Fraud not fully covered or graded Mapping document not fully completed All easy to fix and finish off you ICAS project

38 Internal Controls and Accounting Systems Malcolm Green MAAT TEP FInstSMM Chairperson AAT Birmingham branch