AN INVESTIGATION INTO ACCOUNTING SYSTEM

An Investigation into Accounting System of Cookridge Limited



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Table of Contents

Terms of reference2

Executive Summary2

Methodology2

Introduction8

Analysis and evaluation of current system9

Recommendations10

Cost benefit analysis12

Appendices16

Mapping to the assessment criteria33

An Investigation into Accounting System of Cookridge Limited

Terms of reference

This report has been prepared to understand the role of accounting in Cookridge Limited in terms of its book keeping system, internal control system and fraud detecting system. The report is to identify weakness of organization and its impact on the organization.

Executive Summary

The business report of Cookridge Ltd. shows weakness of the organization. The weakness identified in the report is poor recording of petty cash. In order to overcome the weakness certain recommendations are suggested like updating system with accounting software's, taking measures to detect and prevent fraudulent activities occurring in the firm and to conduct different training activities so that employers know about the changes taking place in the professional world. According to the recommendations, cost benefit analysis will help the organization in estimating cost and evaluating the benefits that could be earned from the investment and to take decisions about implementing the recommendations. It can be concluded from the business report that by investing small amount of money, management will generate fruitful benefits not only for the workers but it will also take the organization to the next level of success.

Methodology

The methodology used to prepare this report is to take help from secondary data. I used literature review relating to analyzing companies, accounting functions and structure of these functions, their accounting system and internal controls. I also use literature reviews which help me in understanding procedures for identifying weakness and fraud and prevention of fraud. The related literature review is as described below in details.

In order to analyze the Cookridge Ltd. accounting system we must build an understanding of different aspects that comprises in an accounting system. According to (Machintosh & Quanttre, 2010, pp.384), Accounting systems are the key of success for many organizations working in this world. Accounting system has a very significant part of internal control, without which this system may not work to best of its standards. Accounting system is a process of identifying, recording, preparing, analyzing and interpretation of useful information to guide organizations in achieving their goals and objectives. According to (Nobes, 1997, pp.2-3), simply accounting's main function is to calculate profit earned and do valuation of the assets. It also aids in communicating financial information to concerned authorities and do recording through double entry bookkeeping method.

According to (Okoye, 2008, pp. 1), there are three areas of accounting functioning today in the world. These are cost, finance and management accounting. First, is financial accounting which treats money or finances as a factor of production and aids firm in analyzing the future course of action on a quarterly, monthly, semi-annually or yearly basis. Second, cost accounting that aims at calculating all the costs involved either direct or indirect cost of production? On the basis, of the cost accumulated firms take decisions regarding improvement and cost ...