Chic Paints Ltd

Investigating and making recommendation for the improvement in the accounting systems of

Chic Paints Limited


1 Terms of reference

2   Executive Summary

3   Methodology

4   Introduction

5   Analysis of the current accounting system

6   Recommendations

7   Cost/ Benefit analysis

Appendix 1 – SWOT Analysis

Appendix 2 - Fraud

1   Terms of reference

This report covers the criteria for the AAT Level 4 Unit – Internal controls and Accounting systems.

The company in the report is Chic Paints Limited. The report looks at the weaknesses and makes recommendations for the accounts receivable and credit control department. It also looks at the risks of fraud and the controls in place to prevent this.

The report also looks at the information required by the internal and external stakeholders of the organisation and what the information is produced for.

Ethical and sustainability issues have also been considered and recommendations made to improve these within the organisation.

2   Executive summary

At present the data is entered on to excel in the first instance and then transferred on to another system by journal entries at the end of each month. This needs moving on to one centralised system such as Sage Line 50 and the old accounting system needs discarding along with the manual records. The accounts receivable clerk needs to focus on one job and not two so an additional staff member may be required. Internal controls need to be put in place by using the procedures mentioned in this report. This will minimise the risk of fraud.

There are no checks currently in place to reduce errors. The work will need to be checked by a manager and the accounts reconciled to bank statements on a regular basis. This includes checking invoices and credit notes and notifying managers of any errors made.

A segregation of duties is also required as there is currently only one clerk completing both the accounts receivable and...