Aat Icas Project

An analysis of the Purchase Ledger
of Central Taxis Limited with recommendations for improvements

List of contents


  1. Terms of Reference 3

  2. Executive Summary 4

  3. Methodology 6

  4. Introduction 7

  5. Review of the Purchase Ledger                 11

  6. Weaknesses 26

  7. Recommendations 30

  8. Appendices                                                                                       37


This report has been prepared to cover the requirements of Association of Accounting Technicians (AAT) level 4 ‘Internal Control and Accounting Systems’.

The objectives for writing this report are to:

  * Analyse the current accounting systems of Central Taxis Ltd and to identify any weaknesses within the system.

  * Make recommendations to improve the weaknesses identified in the accounting system.

The analysis of the accounting system identified areas of weakness in the Central Taxis Ltd. This report contains a list of recommendations for improvements to the accounting system. This should reduce the risks of fraud, ensure the Data Protection Act (1998) is complied with and the company abides by the AAT’s code of Professional Ethics.

The evaluation of the accounting system found the following weaknesses:
  * Filing cabinet containing supplier files and confidential information is not always locked
  * Purchases Manager is solely responsible for choosing suppliers
  * Quotes are not given for repairs on taxis
  * No purchase orders are used by the system
  * Drivers are permitted to choose a repair garage in emergencies
  * Some taxi repairs invoices are not authorised by the Purchases Manager
  * Invoices, credit notes and remittance advice notes are received in paper format
  * All supplier payments are negotiated on 30 to 45 days
  * No percentage check...