Chic Paints Ltd

6. Weaknesses

6.1 CPL’s accounting system has many weaknesses that have been identified are listed and to what function they relate to.
6.2 CPL has some ethical issues that need to be evaluated and are as follows;
6.2.1 CPL Directors are purposefully delaying payments to creditors in order to comply with the bank overdraft covenants. This can be recognised as an unethical and fraudulent action. By delaying payments to creditors this may lead to issues with their trade relationships and prevent them from getting any future discounts. If this continues creditors may reduce or even withdraw CPL’s credit facility. There should be an honest relationship with suppliers and customers as it is vital to maintain an integral business.
6.2.2 CPL’s accounts department uses 40 Microsoft Office computers with legitimate licences however, there are two that do not have actual licenses.
6.2.3 Store manager is in possession of a personal memory drive with company information. Having possession of this personal memory drive is a threat to the CPL’s confidentiality as the manager may lose or misplace the device leaving all the information accessible to the public.
6.2.4 By lying to their suppliers, CPL is breaking the ethical principle of integrity by making excuses to them when payment is due.
6.2.5 CPL agreed to sponsor their local football club Ashton Wanderers and pay for their kits. When payment was due, they decided not to support the team as they had performed badly which lead them to withdraw their sponsorship.
6.2.6 A salary package for a staff member had been given to a different clerk without his permission. This is breaking the principle of confidentiality.
6.3 The IT system in place needs to be evaluated.
6.3.1 Currently the password system can be used to access not only the payroll system but to the general ledger.
6.3.2 CPL’s line manager has access to all computers as he is informed of everyone’s passwords
6.3.3 Following on from point 6.3.1 &...