Raspberry Co

a)
Direct Control Test Of Control
1-Pre-printed forms are completed by Physically visit the site and see when
HR for all new employees and copy is there is a new joiner proper procedure
sent to payroll department for is being carried out pre-printed sheet
employee to be set up for payment. is being made by HR department and
This ensure that there is proper after verification payroll department
segregation of duties and that each set up it for payment.
department is working their own
assigned work and if there is an
attempt to do fraud it will be timely
spotted and reported.
2-The Quarterly bonus is entered into Ask for the sample of the bonus of
the system by the clerk and checked by employees and compare it with the
senior for input errors prior system both should matches.
processing.
This ensures that if there is any error in
the bonus that is entered by the clerk
can timely spotted and corrected so
that there is reduced risk of employee
dissatisfaction.
3-Production employees are issued Ask any employee to swipe the card of
with clock card and are required to other employee if security staff stop to
swipe their cards at the beginning and swipe the other card than this means
at the end of shift. This process is control is working.
supervised 24 hours by the security
staff.
This ensures that the no employee
swipe the card of other employees
who didn’t come to the work so that
employees are only paid for the hours
work which will prevent company from
extra cost.
4-Exception reports relating to changes Ask for the exception report and
to the payroll standing data are ensure that it is signed by payroll
produced and reviewed by the payroll director.
director.
This ensures that the no fictitious
employees are added in the payroll
standing data that will lead to extra
cost to company.
5-Two members of payroll department Physically visit the site where pay
produce the pay packets one is packets are prepared and ensure two
responsible for preparing them and persons are doing their own job.
the other checks the finished pay
packets.
This ensures that segregation of duties
are carried because one person is
preparing the pay packets and other
person is counting the cash so that
there is reduced risk any fraud.

b)
Control Deficiency Control Recommendation
1-The production department The amount of salaries to be paid to
supervisor determines the amounts to the individual should be done by the
be paid and notifies the payroll board or any senior official and must
department. be authorized by the board so that
This will lead to an increased risk of agreed salaries are paid and paid only
fraud because supervisor might give to the bona fide employees.
high salaries to his close friends and he
might add any ficticious employees
which can lead to cost for the
company.
2-Payroll system automatically Payroll calculations generated by the
calculates the gross and net pay along system must be checked by the senior
with the relevant deductions. These person so that if there is any error
calculations are not checked. spotted it can be timely reported and
This will lead to increased risk of error resolved.
and employees dissatisfaction because
any system error can cause over and
under-payment to employees that will
result in reduced employees goodwill
and increased cost to company.
3-Holiday request forms are required Holidays forms should always be
to be completed and authorized by the prepared and authorized by the
relevant manager however this does relevant manager so that manager is
not always occur. aware of employees on holiday and
This can lead to loss of revenue for the employee on work and this work
company because employees will take should be evidenced by the sign on the
holidays without informing which will holiday report.
lead to loss if the company get
shortage of employees in its busy days.
4- The pay packets are delivered to the Pay packets should always be
production supervisor who distribute distributed by the finance department
them to employees. to employees by getting the ids of
This leads to increased risk of theft of employees so that there is reduced risk
moneyt because salaries of 70% of of theft of money and salaries are only
employees is huge amount and given to bona fide employees.
production supervisor can steal the
money leading to huge loss for the
company.
5-Senior payroll manager reviews the Reconciliation should be reviewed and
list of bank payments and agrees this authorized by the senior manager and
to the payroll record if there is any amendment reports should be made
error, the payroll senior manager and authorized by the senior line
amends the record. manager so that if there any wrong
This leads to an increased risk of fraud entry of fictitious employees it can be
because payroll managers can add timely identified.
fictitious employees that will cost to
company.

Camomile
 Control Deficiency Control Recommendation
1-It has been noted by the internal Ensure that whenever money is taken
audit department that on some by employee for sundry expenses petty
occasions petty cash sum and receipts cash voucher should be signed and
are not equal. authorized by the person on the
This leads to an increased risk of fraud counter and ensure that the employee
because employees might have spent give receipt as proof of money spent
money taken for business use on non- on business expense.
business activity and that’s why they
didn’t return the receipt of money
spent.
2-At the end of each day tills are The cash of individual till should be
closed by the restaurant manager who count individually so that if there is an
count the cash in total of all five tills. less cash found it can be identified and
This will lead to increased risk of error reported.
because if there is any discrepancy in
cash counting and total sales error
cannot be identified because all cash
of five tills are counted collectively.
3-Any discrepancies are noted on the The process of counting of cash should
daily sales sheet if the sum of daily be monitored by two to three persons
sales does not match with the credit so that the risk of doing fraud is
card voucher and cash in the till. reduced.
This leads to the increased risk of fraud
because the manager can steal some
cash while counting and write it as a
discrepancy.
4-Each venue has a specific log on code Each till should have different
which can be used to access all five password known by the responsible
tills. official so that risk of theft on money
This leads to increased risk of theft of can be reduced.
money in the till because if any person
know the log in of one till he might
steal cash from all tills by logging in the
same password.
5-Safe is accessed by the key and key is Key safe should be replaced with the
stored in the drawer of manager desk modern digital safe so that only
when not being used. responsible official can access the safe
This increases the risk of theft of cash by fingerprint or password.
from the safe because anyone can
steal the key and use it to open the
safe that will lead to loss for the
company.
6-Cashier agrees the cash transferred More employees should hired and the
by the security company and cash per tasks should be split between them so
daily sales sheets to bank deposit slips that there is segregation of duties and
and to bank statements. Cashier the chances of human error is
update the bank ledger account. minimized.
This can lead to increased risk of error
because one person is doing a lot of
roles and there is chances of human
error.
7-The finance director is given the total Finance director should match the
amount of the payments list to individual expense with corresponding
authorize. bank transfers despite of just looking
This increases the risk of authorizing at the total amount of payments and
the payments that might be fictitious after reconciling it should be
or there might be errors in the evidenced by the sign of financial
individual transactions. director.
8-Bank reconciliation is done every Bank reconciliation should be
two months . performed maximum after the month
This increases the risk of error because so that if there is any error it can be
There might be some errors in bank identified and corrected and this
ledger account that could pass onto reconciliation should be evidenced by
the financial statement leading to the signature of person doing
reduced goodwill of company. reconciliation.

Fressia
 Deficiencies Recommendations Test of Control
1-Sales Ledger clerk carry The credit limit should be Ask a dummy customer
out credit checks on new set by a professionally to order and ensure that
customer prior to being qualified official like a its credit limit is being set
accepted and then set financial controller so by the financial
their credit limit. that the risk of bad debt controller and is being
This leads to increased is reduced and it should evidenced by the sign.
risk of error because be evidenced by the sign
sales clerk is not that of financial controller.
much qualified to set
credit limit for new
customers that can lead
to bad debts and
company loss.
2-Sale order number is Sale order should be Ask for the sales order
based on sales person's sequentially numbered and ensure that they are
own identification and sequence check sequentially numbered.
number. should be performed
This could lead to regularly so that if there
customer dissatisfaction is any misplaced sales
because any sales order order it can be timely
misplaced cannot be reported.
identified hence leading
to loss of customer
goodwill and revenue.
3-Lily shah finance clerk More employees should Physically visit the site
posts bank transfer be hired so that task and ensure tasks is being
receipts, update the list between them can be done by the different
of individuals, and split and no one is over individuals not the single
performs the bank burdened with tasks and person.
reconciliation. there is reduced risk of
This leads to the human error.
increased risk of fraud
and error because one
person is doing a lot of
task leading to potential
of human error.
4-The basis of standard Standard cost should be Ask the management
cost was reviewed reviewed maximum 1 when did they update
approximately 18 year later so that there is their standard cost.
months ago. no significant difference
This leads to an between the market
increased risk of loss of values.
shareholder goodwill for
the company because
cost of materials might
be changed due to
inflation and by this
wrong provision will be
made which will impact
financial statements.
5-The finance director The finance director Ask for the sample of
reviews the total to be should review list system generated
paid on list of automatic individually generated by calculations and compare
payments and total the automatic system with the payroll record
amount as per payroll and compare to the and ensure the
record. payroll record so that if reconciliation is signed
This can cause an there is an error spotted by the finance director.
increased risk of loss for it can be timely
the company because corrected. This review
there might be some should be evidenced by
fictitious employees in the sign.
the list and paying them
will cost to company.
6-At the end of each Payment should be made See the overtime sheet
quarter payroll after the overtime sheet reviewing date and
department send an is being reviewed by the payment date and
overtime sheet to the production director so ensure payment is done
production director for that if there is any error after reviewing the
review. it can be corrected overtime sheet.
This could lead to a loss before payment to
for the company because employees.
if payment is done
before any review there
could be over and under
payment to employees
which could also lead to
loss of employees
goodwill.