Controls Over Non Current Assets

Submitted By emsesongchoem
Words: 821
Pages: 4
Open Document
Report to Sandra
Re: Controls over Non-Current Assets
By: HD

Introduction

The purpose of this report is to evaluate the business’s procedures over controls laptops and to make recommendations so that the business will have better control over non-current assets.

Importance of Internal Controls

Non-current assets are those assets acquired by the business for the purpose of earning revenue, rather than for the purpose of resales. Some of these assets are often called “property, plant and equipment” and are usually kept for longer than one accounting period. These assets come at a considerable expense to the business, so they require adequate controls to be implemented to protect them. A suitable control system includes procedures addressing the following issues:
• Purchasing of assets
• Administrative controls
• Property, plant and equipment register

Acquisition of Assets

It is pleasing that initial purchase of 10 laptop computers was properly authorised. However, Amanda had no authority to purchase extra 3 computers. While Amanda purchases three computers, she might not obtain the entire best offers and There is no mention as to whether the new computers are the same as the original ones purchased in terms of performance, reliability and repair costs, etc. The business usually extends the warranties of the computers within three years just in case if there is any problem with it. The three computers that Amanda bought has not been record in the systems and it doesn’t mention whether the company had paid for it yet. Also, there are no documents for proof of owner ships. When purchasing any assets, the PPE register is required to a business. Principally, the control aspect serves to protect honest employees and identify those who responsible for theft, misuse of judgement.

Identification of Assets

It is of concern that there is no record of the number of laptop computers owned by the business. It must be records and have correct value to calculate depreciation as accurately as possible as this will affect profit/loss. The serial numbers should be recorded and engraved on items and must be identify which computers it is belong to.

Asset Storage and Security

Laptops are valuable and due to their size easily stolen if not kept in a secured area (ie an area able to be locked). Sign on door insufficient. Insurance companies may not pay claim for theft if they are not stored in a secure area. Procedures need to be implemented for when employees are issued with the laptop computers. This should also include reminders on how they should look after these valuable assets. ie they shouldn’t be left in the backseat of a car as this is very visible and enticing to people wishing to misappropriate these items. It is of concern that the employee didn’t report theft immediately as the business would need to notify the insurance company immediately and they would probably want to see a police report verifying theft from vehicle.

Disposal

The correct procedures need to be implemented when disposing of a laptop computer. Employees don’t have the authority to sell their computers to friends. Obviously this practice would not
Show More

Related Documents: Controls Over Non Current Assets

Annual Report Accounting 100 Essay

Annual Report Project: Kohl’s Fiscal Year 2011 Diane M. Chapman ACC100 Accounting 1, Professor Ekaterina Kouprianova June 1, 2013 1) Identify and explain the main sections of the annual report. The Kohl’s Corporations annual statement for fiscal year 2011 is broken down into several parts. Part one explains the business as a whole and includes information such as the origins of the company, the type of merchandise sold, overviews of its business strategies, store locations and sizes, supporting…

Words 723 - Pages 3

Woolworths Financial Ratio Report Analysis - Accounting Report Essay

Woolworths Financial Ratio Report Liquidity, Solvency and Profitability Abstract This report consists of ratio calculation and analysis of Woolworths’ liquidity, solvency as well as profitability. Liquidity ratios include current ratio, quick asset ratio and inventory turnover. Solvency ratios include debt to total asset and interest coverage. Profitability ratios include return on owners’ equity, payout ratio, return on assets, return on sales, asset turnover, cash return on sales and operating…

Words 3667 - Pages 15

Essay on Report the Role of Accounting in Organizations and Society

REPORT The Role of Accounting in Organizations and Society Accounting plays an important role in interfacing society and organization. As it is also mentioned in Burchell article “it is presumed that accountings are there to facilitate organizational and social actions.”As we know that accounting is helpful for structuring of organizational objectives, to reduce financial risk, to make financial decisions, it also helps organization to take into account different stakeholders interest like investors…

Words 908 - Pages 4

Accounting Manager Report FINAL DRAFT 2 Essay

Accounting Manager Career Comm 2200 Submitted to : Derek Jamensky Tracey Dennis, Nikko Narva, Sophia De Borba, Karn Jasuja, Amshaliny Balasubramaniam Table of Contents Executive Summary 4 Introduction 5 Overview 6 Summary 6 Introduction 6 About the Position 6 Daily Tasks 7 Starting Point for a Career 8 Conclusion 8 Career Path 9 Summary 9 Introduction 9 Requirements 9 Work Experience 11 Further Opportunities 11 Current Job Market 12 Summary 12 Introduction 12 Job Availability 12 Salary Range…

Words 5164 - Pages 21

Assessment Task AIS Essay

business operation in which they will be manufacturing and selling women's fashion clothing. After I carried out some research and looked at a typical manufacturing business today, I have done a report for the businessmen. This report provides them with information and recommendations about employing an Accounting Information System. I. Company Overview Company name: Ally P/L Number of employees: 35 people, including 1 director, 1 assistant director, 1 manager, 3 accountants, 5 fashion designers, 1…

Words 1521 - Pages 7

Balance Sheet and Accounting Principles Essay

Exercise 1.1 Accounting principles a |Accounting principle |Entity | |Explanation |The owner and the business are considered to be separate accounting entities, and their records should be| | |kept on this basis. The orthodontist’s fees are an expense of the owner, not an expense of the business…

Words 1467 - Pages 6

vthai assignment1 Essay

Behavior Is Silicon Valley’s Next Big Thing,” which recounts stories of Internet companies that aggressively inflate their revenues, delay the recognition of expenses, and report sales that are not exactly sales. In many cases the actions of these companies, while aggressive, are not in direct violation of generally accepted accounting principles. Discuss why companies might engage in such behavior, and comment on the ethical implications. Companies might engage in such behaviors because it is a clever…

Words 889 - Pages 4

Business Decisions And Financial Accounting

Accounting 100 Chapter 1: Business Decisions and Financial Accounting Chapter 1 Key Points The Basic Business Activities The Three Forms of Business Ownership The Basic Accounting Equation The Financial Statements – The Basic Components The Relationship Between the Financial Statements Operating Activities Investing Activities Financing Activities Sole Proprietorship – Business organizations owned by one person. The owner often is personally liable for business debts that cannot…

Words 836 - Pages 4

Managerial Accounting

Managerial Accounting Basics 1. (S.O. 1) Managerial accounting is a field of accounting that provides economic and financial information for managers and other internal users. Managerial accounting applies to all types of businesses—service, merchandising, and manufacturing—and to all forms of business organizations—proprietorships, partnerships and corporations. Managerial accounting is needed in not-for-profit entities as well as in profit-oriented enterprises. Comparing Managerial…

Words 1050 - Pages 5

Accounting HW Essay

Accounting Chapter 1 Questions 1. Differentiate broadly between financial accounting and managerial accounting. Financial accounting is the process that culminates in the preparation of financial reports on the enterprise for use by both internal and external parties. Managerial accounting is the process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, control , and evaluate a companys operations. Financial accounting is for both internal…

Words 495 - Pages 2