INK WELL LTD

Review of Accounting System in Ink well Ltd.

Review of Accounting System in Ink well Ltd

Terms of Reference

The following report is related to the analysis of accounting system in Inkwell Ltd. The major aim of the report is to evaluate the accounting system of the organization so that corrective measures need to be taken in order to control weaknesses in the accounting system of the organization. The report is to find out the problems that are faced by the organization and then solutions are defined to bring improvement in the accounting system of Inkwell Ltd. The solutions or recommendations identified in the report is to help the firm in controlling fraudulent activities in the organization. Overall the report is try to gather information that is necessary for the maintenance of the internal control system. Furthermore the report is to identify the role of key stakeholders in both internal and external situations in the current department.

Executive Summary

The main objective of this report is to conduct a proper evaluation of the internal control system of Inkwell Ltd. The main focus of the report is to find out the internal control situation especially in the accounts department of the organization. The report is to define the current situation and discrepancies occurring in the accounts department especially in the sales ledger of the organization. Recommendations and identification of the weaknesses are going to help in bringing improvement in the overall efficiency of the organization. The major issues identified in the review of the internal accounting system are: firstly the accounting policies of the organization are not communicated properly in all the departments due to which insecurity of data increases. Secondly the discrepancies in the sales ledger are because training is provided to individual employees according to their job requirement and skills need according to his job position. Third and a major reason of internal control issues in sales ledger is because the data management and its maintenance has not been done properly due to which pending work has increased and thus it has led to a halt situation in the accounts department. Fourth there are several transactions that the accountants were unable to record and now they are unable to locate the transactions in the general ledger. A serious concerned for Inkwell Ltd. is to find out the record of the missing transaction in the general ledger and to find out the cash paid out and received by the organization. These transactions are able to create doubts and led to the origination if fraudulent activities in the organization. Another weakness identified by the firm is the usage of computer system of the organization by unauthorized people. Although a password has been kept but it is very old and thus many people can easily use the computer system of the organization.

Thus in order to bring enhancement in the current internal control system of the organization there are certain recommendations made in the report. These are: firstly it is essential for the organization to ...