GREGG'S INTERNAL CONTROLS

Gregg's internal controls

Gregg's Plc internal controls

Gregg's Plc is the leading bakery in the United Kingdom with more than 1,480 retail outlets across United Kingdom. The company has employed over 19,000 people and serves more than six million customers on weekly basis. The company is operating since 1939 and is famous for its high quality bakery products such as sandwiches as well as selling freshly baked savories such as Cornish pastries and sausage rolls, local items are also very popular. Gregg's Plc is planning to open around 600 more stores in the near future and it will create around 6,000 new retail jobs. More over the company is planning to extend the serving capacity of the existing retails outlets.

The financial performance of the year 2010 shows a positive growth in the overall business activity of the company and the earning per share of the company has increased from 16.6 pence to 18.2 pence. The company has shown a steady growth over the past years and has more than 1,500 retail outlets and shops, with many city centers and towns having multiple stores. In the year 2009, the company announced the extension program for its existing outlets and has become bigger than the famous fast food chain “Mc Donald's”, with in United Kingdom. The company has a divisional structure system with central bakery stores across the country supplying the shops in the nearby areas.

During the year the Board provided additional resource to improve the effectiveness of the Internal Audit team. The function continues to review the performance of the Supply Chain and regional Retail functions across a range of financial and non-financial requirements, reporting findings to senior management and direct to the Audit Committee. (Venables, 1988)The Internal Audit Manager reports to the Company Secretary & General Counsel, to improve functional independence, and has a standing invitation to attend all Audit Committee meetings, not only that part relating to the presentation of relevant audit reports.

Financial highlights for the year 2009 and 2010

 

2010

2009

 

£'m

£'m

Turnover

662.3

658.2

Like-for Likes sales growth

0.2%

0.8%

operating profit

52.4

48.4

Pre-tax profit

52.5

48.8

 

 

 

Pence

Pence

Diluted earnings per share

37.3

34

Dividend per ordinary share

18.2

16.6

Internal controls needed for Gregg's Plc

The Board of the company is ultimately responsible for the internal control system of the company, which covers all the aspects of the company, and for reviewing the effectiveness of these controls. Internal controls are one of the most important and fundamental concepts that business professionals at all levels and both external and internal auditors must understand. (Coetzee, 2008)The business professional builds and uses internal controls while auditors review both operational and financial areas of the enterprise with an objective of evaluating those internal controls. The internal controls system at the Greggs is there to manage the risk of failures and errors to achieve the goals and targets of the company. Therefore, these internal controls are to provide a reasonable and not absolute assurance and guarantee against the losses or material misstatements. (Zack, 2003)The directors of the company regularly reviews the risk faced by the company and update the internal control procedures ...