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nlexa [21]
3 years ago
5

An effective Financial Management Process is dependent on a number of factors. Crucial is the establishment of a sound system of

Internal Control to minimise risk and maximise effectiveness. Outline your understanding of Internal Control and why it is important to have a system in place as part of the Financial Management process. What are the key areas that need to be considered when implementing internal controls? Give an example of three (3) key controls that will assist in achieving these objectives
Business
1 answer:
Margaret [11]3 years ago
8 0

Answer:

<u><em>Internal control area</em></u>: it is responsible to stablish monitoring process in all the areas of the organization that prevent unlawful practices that are not in compliance with the regulations, laws or any external norm applicable to the company.

<u><em>Key areas:</em></u>  below find 3 areas as subjects important to control and 3 areas as departments within the company

  • prevention of reputational risk, prevention of credit risk, prevention of operational risk.
  • Internal audit area, Compliance area, Legal area.

<u><em>Key controls:</em></u>

  1. dual controls in the manufacturing of products prevent operational errors
  2. due dilligences of the commercial area regarding the customers that stablish a relationship with the company
  3. setting manuals that contain how the procedures must be done.
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The receiving department has three activities: unloading, counting goods, and inspecting. Unloading uses a forklift that is leas
stepladder [879]

Answer:

Calculating the cost of each activity,

Unloading = $ 80,100

Counting = $ 37,500

Inspecting = $54,450

Explanation:

Given:

Unloading lease = $15,000 per year

Fuel for the forklift = $3,600 per year

Maintenance for the forklift = $1,500 per year

Inspection uses some special testing equipment that has depreciation of $1,200 per year

Operating cost = $750.

Receiving employees average salary = $50,000 per year

Salaries; 3 × 50,000 = 150,000

Unloading salary = 40%  × 150,000 = 60,000

Counting salary = 25%  × 150,000 = 37,500

Inspecting salary = 35% × 150,000 = 52,500

                              Unloading                 Counting                    Inspection

Equipment               15,000                                                             1,200

Fuel                           3,600

Operation cost          1,500                                                                750

Labor                       60,000                   37,500                          52,500

Total cost                 80,100                   37,500                          54,450

6 0
3 years ago
Howard ​Services, Inc., has $ 8 comma 600 cash on hand on January 1. The company requires a minimum cash balance of $ 7 comma 60
skad [1K]

Answer:

The amount of cash to be borrowed = $18,040

Explanation:

The cash budget shows the expected cash payments and expected cash receipts and cash balance at the end of a particular period.

Note that in the cash budget only items of the cash are considered, therefore items like depreciation, amortization of intangible assets and apportionment of fixed costs are not included because they are not cash based.

The balance at the end = opening cash balance + cash receipts -cash payment  

Applying this to Howard ​Services, Inc.

The amount of cash to be borrowed = Minimum cash balance required - Net cash balance

DATA

Opening cash balance - 8600

Cash receipts- 548,570

Cash payment - 567,610

Net cash balance = 8600 + 548,570 - 567,610 = (10,440)

The amount of cash to be borrowed = 7,600 - (10,440)

                                                               =7,600+10,440=18040

The amount of cash to be borrowed = $18,040

<em>Note a negative amount of 10,400 would mean that that would be first borrowed to balance the deficit, and to take the balance to the minimum required cash balance, an addition 7,600 would need to be borrowed</em>.

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