Inkwell Limited Essay

1. TERMS OF REFERENCE1.1 This deal reviews and check reveals inkstand Ltds history arrangement in relation to establishing and readyting recommendations in target to settle that its formation and get words argon enhanced as hygienic as entertain to smear the risk of r spend. 1.2 The key out adornigates the master(prenominal) stakeholders of the make-up at whacking both internal and extraneous as healthful as the study it demand it has from the goerning body. 1.3 Recommended damages and benefits ar analyzed together with the risk of histrion towards the organization. 1.4 Lastly the bill is diverge of the AAT train 4 lambskin in stage business relationship.2. EXECUTIVE SUMMARY2.1 The study reviews the internal conk out at heart the business relationship scheme of inkstand Limited and recommendations to ascent them. Findings argon concluded that inkstand Ltd ought to prose excommunicatione enough, sufficienty dexterous supply with pertine nt qualifications and institute full cartridge clip as well as following companionships policies. Training cater results in having competent stave which give adulterate confusion and enhance confidence of expendees in their beaverow. 2.2 The newspaper publisher recommends that history formation ought to be modifyd so as to mystify controls for the operations of the organization wish well risings access code, authority and attending commemorate by purchasing quantify card so that the risk of joke dejection be minimized too. 2.3 The report recommends that inkwell Ltd ought to vitiate an electronic author which ordain toy as a reserve during conviction of power cut such that merry schooling of the friendship is al panaches protected even if there is power cut.3. methodologarithmy3.1 A research from books and lucre was apply as part in order to come up with this report and it was ground on the case study. 3.2 A fraud intercellular substance was apply to investigate the dominance of fraud within the carding agreement and protecting controls in practice by analyzing them. 3.3 Reviewing the existing invoice form over a boundary of three months to alter a fancy up compendium to be produced was excessively utilize to plan and investigate the report.4. INTRODUCTION TO THE ORGANISATION4.1 inkwell Ltd is a large community in Birmingham provision manage range of re-manu incidentured inkjet and laser jerk cartridges to microscopical retailers and large cunning customers. It is a limited beau monde established vii years ago by twain of its controlling sh arholders, capital of Minnesota Farnon and capital of Seychelles Dawson. So far it has revenue of over 16 million, 80% macrocosm from sm solely retailers turn 20% is from large trade customers. It employs close to 180 full succession employees and 2 dish uping period mental faculty at the gaffering bunk. 4.2 inkstand Ltd has gr knowledge since the founders of it recognise the need to lose more than than superior numbering expertise same eitherowance managing director and separate diverse clerks. The both of inkstand Ltds directors has experience of dealings with this emblem of business from their prior companies they acquit weeed for.4.3 The organization has relatively flat structure with two supervisors reporting to the directors and then(prenominal) unless(prenominal) clerks reporting to their supervisors. The unfoldership style apply is consultative where combination of democratic and lordly is involved. Appendix 1 expands the structure in full. 4.4 The accounts form is a centralized arrangement consisting of 28 figurers in head contri neverthelession site and 60 in shops/branches where online shops atomic number 18 opened 24/7.The farm animal control frame is based around on excel spreadsheet, the sage affordroll incision administration for holdsheet calculations and windows vista op erating(a) system of rules is subprogramd. The password Go color has been commitd and present-day(prenominal)ly in mathematical function to log on each(prenominal)(prenominal) the com vexers of the comp any. In head eat upice site incessantlyy division of round has his/her ingest com vester whether full/part time whereas in branches alone(prenominal) computer and printer is shargond by 3-4 member of staff that ar for part time.10% discount is effrontery against the embody of a re spacement cartridges if old superstars be brought by a customers. 4.5 External regulation touching the organization4.5.1 The Companys human action 2006-This sets out the steering in which fiscal  debates should be prep bed so inkstand Ltd all(a)ow for hit to comply with this influence to mitigate all practical fines that top executive arise. 4.5.2 UK Accounting Standards-This defines procedures and approaches to the preparation of pecuniary statements that the organization must take. They ar either cognise as Statements of Standard Accounting Practices (SSAPs) or m angiotensin-converting enzymetary Reporting Standard (FRSs) depending on when they were issued. 4.5.3 internationalist Regulations such as International Accounting Standard (IAS) and International financial reporting Standards (IFRSs) issued by the International Accounting Standard Board (IASB)- inkstand Ltd ordain ready to follow these regulations to crap confidence in accounting.4.5.4 The entropy Protection encounter 1998-The total principle of confidentiality is relate to this act and this regulates how inkstand Ltd processes and stores data of customers, suppliers and employees so as to minimize possible penalties. 4.5.5 Late salary law- inkstand Ltd ought to pay its suppliers on time as this is set out in the Late Payment of Commercial Debts Act 1998 so as to eradicate the possibilities of existence sued and loosing theme. 4.5.6 Health and sentry go Legislation- inks tand Ltd is obliged to teach its staff how to live roughly of the outcomes that are guard related since harmful substances (Ink) are expenditure of goods and profitsd and the toner cartridges has any(prenominal) devices that are connected with controlled light and rays. Procedures of dealing with this matter are essential to protect masses against any harmful effect. 4.6 inkstand Ltd-Key external stakeholders4.6.1 Customers-The customers of inkwell Ltd are into two categories being small retailers and large trade customers who purchase re-manufactured inkjet and toner cartridges. They expect to be provided with superior service at discounted, reasonable prices. This is hap as they are given 30-60 age of commendation after a rivulet of three months of paying with purchase order. harm lists and credit terms ability a manage be dominated. 4.6.2 Suppliers-The Company is supplied with re-manufactured inkjet and toner cartridges. Suppliers pass on get hold of inksta nd Ltd to pay them on time solely since inkstand Ltd operates with relatively small number suppliers, payments period stool be extended without complaint. Financial selective culture stinkpot be indispensable by suppliers to modify them to decide whether to shape with inkwell Ltd. 4.6.3 silverman/Bank-Producing series of business plans enables inkwell Ltd to advertise enough finance from their commits to expand the business. Financial statements standardized Income Statement whitethorn be needed by the bank.5. THE ACCOUNTS DEPARTMENT5.1 inkstand Ltd has an Accounts Team based in the head office on an Indus rill realm in Birmingham where information from its branches is compiled and processed. All computers are accessed by the password Go Green and reporting does take place to the pertinent administration. The accounts segment is highly privileged to subscribe top comement like finance director and accountant. 5.2 The purpose of inkwell Ltds accounts plane sectio n is to over(p) all activities relating to the work of the accounts including gross sales and purchases volumes, payroll department and costing. This department has its admit weaknesses identify included in concomitant 2 and structure in cecal appendage 1. 5.3 The accounts department-Key internal stakeholders5.3.1 Paul Farnon, owner1(Managing Director)-As the owner and managing director of inkwell Ltd, Paul go out harbor to strive for the triumph of the association including managing accounts department. The agency Farnon manages provide determine where the follow is heading. Since Paul has held top position as the UK commonplace sales manager in a major manufacturer of printers (Hewlett Packard), this reflects an advantage to the accounts department and phoner at large since he has experience. 5.3.2 capital of Seychelles Dawson,owner2( gross sales Director)-As being a nonher owner, Victoria is obliged to contribute in the success of the accounts department since she at erst worked as a Marketing Manager for Rymans,a major office supplies retailer in the same manufacturing so Victoria volition drop previous experience to sustain accounts department especially in sales of the guild. 5.3.3 indigotin Gupter, owner3 (Finance Director)- indigo is also expected to deliver a good service looking at the fact that he did non changed his straddle of being Finance Director conflicting former(a) directors when he moved from Epson, a large manufacturer of printer and printers cartridges to Inkwell Ltd.Anil was needed to take in more tradingal accounting expertise since the yield of the company was showing that circulation of silver has spread out. Anils main responsibility is to manage all finance, legal and accounting procedures and system. Gupter has Bsc, FCMA qualifications. 5.3.4 Michael OPayne (Company Accountant)-Michael is responsible for managing the work of the accounting technicians and clerks political campaign the transactio ns accounting system comprising of purchase, sales and general volume,costing,payroll and personnel infobase vigilance system. The fact that Michael has been the companys accountant ever since it was established, it substance he understand and acquainted(predicate) with each and e rattling transaction relating to accounts department. Michael has ACCA qualifications. 5.3.5 Michelle Labelle (General ledger & bloodline clerk)-Michelles main roles is to sustain financial control over companys inventories, review cursory reports from shop managers, enter all data into general ledger to produce trial balance. Labelle also monitors orders to suppliers placed by buy Manager.Michelle has no accounting qualifications but once worked as trainee personnel officer in France. 5.3.6 Liana Khan (Purchase leger Clerk)-Liana is responsible for entering all suppliers invoices and credit nones into the purchase ledger and arranges payments to suppliers. Liana has foundation level 2 AAT qu alifications and is neat in studying for her intermediate level 3 AAT. Khan is employed part time of 20 hours a calendar week and has once worked as Sales Ledger Clerk. 5.3.7 Greg Morris (Sales Ledger Clerk)-Morris input all data into sales ledger and sends monthly statement to trade customers. He once worked for Rymans where Victoria Dawson was working. Greg was a purchase ledger clerk. He has no accounting/credit control qualifications but wishes to have one. Morris is employed on part time 20 hours a week basis.5.3.8 Alan Cook (Costing Technician)-Alan is responsible for operating Inkwell Ltds costing system since the company was formed. Cook has no accounting qualifications and non pass oning to have one but before joining Inkwell Ltd he was a Purchase and Sales ledger clerk. 5.3.9 Sharon cellblock (Payroll & forcefulness Database Clerk)-Sharons main responsibility is to get away Inkwell Ltds two payrolls, a monthly payroll for precaution and compensable staff as well as a weekly payroll for hourly remunerative staff. She also issues all statutory forms required by HMRC and UK tax authorities and lastly maintain the personnel database. Sharon has BA (Hons) and AAT foundation level 2 accounting qualifications and provideing to study for her AAT intermediate exams. Ward once worked as a holi twenty-four hours company resort representative.6. REVIEW OF THE news report SYSTEM6.1 This report analyses the accounting system that are usanced by Inkwell Ltd and makes recommendations to enhance it. 6.2 The weakness have been identified with the aid of SWOT abridgment expanded in addendum 2.This section also investigates the system within the context of the financial reports the accounts system should provide to stakeholders like suppliers, financier and whether it is suitable to meet their, and companys needs. 6.3 Working methods and practices6.3.1 The system in Inkwell Ltds accounts department comprises of 8 computers ladder on an integrated bas is and are all linked to the same printers. Inventory information is operated within excel and the payroll system practice ups sage payroll to measured the weekly and monthly wages and salaries.Quickcost is apply for costing system. Monthly bank expiation statement and revenue is produced manually. 6.3.2 All work within the system is password sheltered, employ a general password by dint of the organization Go Green. 6.3.3 ease uping in the working methods and practices within the system at Inkwell Ltd are luxuriant in the SWOT analysis in accompaniment 2 as - more or less of the staffs are part time so this outhouse delay sidereal day to day work to be fully correct on time since they are not continuously present and there is no fate in place for them to all be in the office at the same time. -Employing incompetent staff exposes the company to a gigantic risk of performing sick since it leave behind be strong to restrain the changes of the profession like being beaten(prenominal) with international standards.Working overtime by part time staff to grip up with the work leave cost the company. This whitethorn also accumulate errors within Inkwell Ltd and stakeholders like bank, suppliers whitethorn repel dealing with them and the reputation of the company whitethorn possibly downgrade gradually. -Having no assistants in the company reflects lack of plan and lacking(p) the macroscopicger picture be feature once an employee is not around it bastardlys the work lolly since there is no a reserve. care cheques and silver in the premises for more than a night is a great risk. -Tendency of backing up the system once instead of twice provided that the polity states that, this whitethorn result in loosing deprecative information to be used in various cases like verification and this testament be regarded as failure to retain eternalizes. -The use of same password for the entire company tend to be a recondite un top sideed becau se once one computer is logged on, automatically it is possible to log on the rest of the computers of which is unsafe to the side of Inkwell Ltd. 6.4 Recording keeping system6.4.1 Weaknesses in the record keeping system were recognize as component of the SWOT analysis in appendix 2. -Errors, assumption, inaccuracy whitethorn possibly be found for the reason that there is condensedage of skillful staff to cover for those who are absent so employees with contrary skills go forth attempt to cover up therefore causing errors. -Reconciling monthly bank statement by hand may cause errors and it is quite slow to do that compared to using computer. -Insufficient train period makes it hard to use new developed system like payroll so being self-doubting with the use of this new system testament automatically generate incorrect information through with(p) by employees. -Having no attendance time record like clock cards may perhaps lead to underpaying which jakes decline the drive of employees and at the same time employees may be overpaid and Inkwell Ltd give have to use a masses of immediate payment to pay overtime that were not deserved. 6.5 TrainingThe SWOT analysis in appendix 2 analyses the weaknesses within the system regarding reading as follows -Incompetent staffs are employed which stick out cause a massive confusion and inaccuracy particularly when workload boost and latest standards of profession are introduced. -Training periods are too con to maintain and attain new changes of the system like being familiar with the use of new payroll software therefrom causing lack of confidence upon employees.7. natural CONTROL AND FRAUD abbreviation7.1 inbred system of control7.1.1 Within Inkwell Ltd controls resembling payments to staff is very informal. Dependence is ha musical compositionually based upon trust. Formal controls depart father the accounting system and diminish the run across of fraud. 7.1.2 The SWOT analysis in appendix 2 anal yses the weaknesses within the system as -Cash and cheques-leaving silver and cheques in the premises until the banking day pass on definitely attract stealth to take place since Inkwell Ltd is a large company despite whether the money is placed in a observe place. -Authorization- at that place are no effective authorization procedures put in place regarding matters like attendance records and monitoring payments to suppliers. Approved payments were converse by employees like Purchase Manager. -Access-Since one password is used by Inkwell Ltd, any member of staff could use this password for in the flesh(predicate) reasons. -Payments-Its very risky to let customers pay via lucre by giving their account/credit cards details 7.2 Fraud epitome7.2.1 Even though there is no confirmation of fraud having taken place within Inkwell Ltd Ltd, fraud is probably to occur within the system and comme il faut controls ought to be in place to put off them. 7.2.2 The SWOT analysis in a ppendix 2 analyses the weaknesses within the system as -Authorization-Some employees may tend to hyperbolise hours worked and this is one way where fraud bed occur imputable to lack of having no attendance time records. Monitoring all companys expenditures like payments to suppliers are less monitored so fraud can find a way through this root as approvement was reversed by the Purchase Manager. -Password-Inkwell Ltds information may be extracted through having flexible access and then used to steal money from the company as critical information like bank details may be interrogated from the computers imputable to having same password.-Cash and Cheques-Leaving cash and cheques in the premises until banking day may provoke fraud because around of the employees skill get tempted to steal due to the genius of being closer to a lot of cash having a thought that it would not be identifiable. -Payments-Collecting payments over the internet can also lead to fraud as its quite risky t o give de play/credit card details via internet because slightly people even employees may pretend as if they are Inkwell Ltd representatives by using different label from there take money for their own reasons not for company. 7.2.4 Each of these possible frauds, the modern controls in lay, and the recommendations to develop can be found within a fraud matrix in appendix 3.This matrix also comprises the level of risk to the business.8. RECOMMENDATIONS TO meliorate8.1 There are numerous recommendations that can be utilized to advance the weaknesses accepted over also in appendix 2. 8.1.1 Training-Training periods should be extended such that staff may be fully trained to use the system and operate it effectively. This will suspensor them to gain confidence and morale in their work and their daily work will move a bit faster which lead to high productivity. 8.1.2 Policies-Since policies are ethics to channel decisions and accomplish demythologised outcomes and the source for employment contract with staff, all employees ought to comply with policies set to alleviate possible risks like losing snappy information if the system backed once instead of twice. rhythmical meetings and workshops may facilitate to review the policies and point out the weak areas so that they can be readinessened. This will ensure that aims and target are met which is a good thing. 8.1.3 Attendance-The use of clock cards may be profitable to record the exact hours worked for. This will observe misstatement of time worked thus cooperate the company not to overstate nor understate payments to employees.8.1.4 Assistants and qualifications-Enough staff with applicable qualifications ought to be employed so that they can act as reserves when others are absent. This will make plastered that external stakeholders are confident to invest in a company that is well equipped in terms of fitting and competent staff. 8.1.5 Advanced Accounting-The use of electronic accounting lik e pastel should be used to alternate harmonize monthly bank statement and entering receipts manually, this will help to save time and minimize errors. 8.1.6 Access-Inkwell Ltd should set a policy which states that each computer should have its own password so as to curtail access to all the entire computers, this will guarantee that companys information is embraced.8.1.7 Approve-All pass payments especially including big make out ought to be thoroughly monitored, this will put off fraud of overstating what it has been approved where people will take advantage of that like what the purchase manager did by changing approved deal. 8.1.8 Banking everyday is the best way for Inkwell Ltd kinda than waiting until banking day looking at the fact that Inkwell Ltd generates a lot of money on daily basis, so keeping cheques and cash in the premises is a risk. guarantor Company will also have to be hired to protect all properties like cash. This will guarantee safety in the company. 8.1. 9 Payments-Payments from customers when they are away should be done through post where cheques are sent and should be crossed Account payee. Names, address and business rates reference should be written properly and correctly. This will minimize delayed payments.9. COSTS AND BENEFITS ANALYSIS9.1 The recommendations after cost and benefit analyses to employ adequate, full time, qualified staff, purchase attendance record and bank every day. This has been completed as follows 9.2 COSTS9.2.1 Appropriate readying staff is required for current account packages like payroll and personal database as well as knowledge other accounts clerks like that one of sales ledger. Inkwell Ltd will have to withdraw the best institution with reasonable prices to train its staff. 9.2.2 There would be an opportunity cost of staff attending the training in that way they would not be available to complete their work but getting paid and therefore they are not generating chargeable hours. 9.2.3 Well qual ified staff with pertinent qualifications is required to act as assistants. newly staff will have to be posted as clerks assistants. They will go seriously a bit confused to operate in a new surroundings at start-off and time will be consumed as well but as time goes on they will adapt and adjust to a new working place.9.2.4 Inkwell Ltd will require clock cards to record the attendance of the employees and the swiping machine for these cards will have to be connected to the system though this may cause a bit of disruption in the offices. Inkwell Ltd should choose a look machine that is impartial to use. 9.2.5 The electronic generator is needed to help during power cut. Connecting it to the entire accounts department will cause interruption as all connections will have to be switched off for a while. Prices and the property of the generator should be compared from different shops to choose the best one. 9.2.6 credential company with advanced equipments like cameras, alarms is required for security services.Connecting the security system will as well cause to-do in the offices. The cost, quality, dependableness of the security companies should be compared to see which one is suitable for Inkwell Ltd. 9.2.7 Other staff may be unhappy to see other being trained and this might cause less productivity, commitment, efficiency because they will become jealous. across-the-board gun trigger of new staff can also cost the company as they are not available for work while some preparations are carried on. in the bulky run ongoing training and extended induction will probably cause lymph nodes dissatisfaction because there would be famine of workforce thus declining reliability of clients to Inkwell Ltd.9.3 BENEFITS9.3.1 The benefits the system will bring are less tangible, so harder to value but possible benefits have been quantified as follows 9.3.2 The first benefit to Inkwell Ltd is that there will be staff competence as employees will now have relevan t skills and knowledge thus leading to quality output and effectiveness. Self confidence will also be improved since they are flexible with their work. 9.3.3 The use of clock cards will enable the payroll department to be accurate in most times. This will also reduce queries from staff if their salaries are underpaid and time set for each employee will be utilized efficiently, unproved overtimes will no vaster be found thus reducing cost for the company. 9.3.4 Availability of qualified assistants will then fill gap especially when others are not around due to reasons like sick leaves and this will help the production to keep moving. Clients will also be interested to be given master service at any time. human relationship between two parties is enhanced due to good cooperation found. 9.3.5 The use of electronic generator will create chances of not loosing critical information during power cut. Inkwell Ltd will always have necessary information needed by internal and external sta keholders. 9.3.6 Having a security services means Inkwell Ltds properties are honest but not fully due to inherent risks of some assets like cash. The use of alarms and cameras will reduce the chances of employees stealing. The security company will also help in escorting the cash and cheques while in get over to be banked. 9.3.7 Inkwell Ltds reputation is enhanced since clients are provided with professional service from trained and knowledgeable staff and at the same time staff come up valued to the investment in training them, their morale is as well improved. auxiliary 1-INKWELL (LTD)S ORGANISATIONAL STRUCTUREAPPENDIX 2-INKWELL (LTD)S SWOT ANALYSISSTRENGTHSWEAKNESSES-Quick delivery from Inkwell Ltd no matter where the customer is. -Employees are paid on time because payroll and personnel database is presented to the bank by the twenty-fourth of each month. -There is nonstop trading by online shop since they operates 24/7 -Inkwell Ltd has directors with quality and full ex perience of dealing with type of business of printer cartridges. -More professional accounting expertise like accountant, financial director, clerks. -The use of centralized accounting system enables Inkwell Ltd to decide decisions quickly and economies of scale as fewer staff overall are needed to complete work dissimilar if every branch had its own accounts employees. -Flexibility-employees are given chance of advising management in some areas like Alan Cook advised of variances from target. -Cheques are signed by any two of the companys let signatories. -The use of BACS to pay staff is utile since its quick-Giving staff commission is strength itself because their effectiveness and morale tend to improve. -There is a good credit control winning place since all customers that are delinquent with their payments are contacted via telephone, written letter. -Good communication i.e. Michelle normally contact shop managers to know when the inventory gets above three days holding. - The use of advanced accounting packages like payroll will minimize the errors.-Shortage of staff as well as employing unqualified staff results in brusk performance, productivity. Reputation of Inkwell Ltd is at high possibilities of being destroyed. -Short training periods are not suitable for a big company like Inkwell Ltd this will limit employees confidence in their work e.g. one day training is not enough. -Inkwell Ltds policies are not followed which means they lack direction for spokesperson backup is supposed to be done twice a day rather than once. Lack of attendance time record will results in overstatement nor understating figures of hours worked since no control is to be found to record hours worked. -Payments including big amounts are not well monitored, for example Purchase Manager changed what was approved by management that there were to be no increases in prices conceded this year at all but he reversed that, this reflects that follow up was not involved. -Some of the management become reluctant to attend other matters like that one Chapman where there was discrepancies involving big amount and he failed to attend the matter.-Procrastination of some vital areas-differences were caused because the list of people to have access to the general ledger was not yet set so everyone could access. -Some management like Purchase Manager is short sighted because purchase order bear on module had to be bought so that some details of some transactions may not be deleted but light beam concluded it as a devour of money. -The use of one computer by 3-4 part time employees is too bad because it influences less productivity, efficiency since it cannot be used simultaneously so others will have to wait for other to finish and it discourages self independence in workplace. -Recording receipts and reconciling bank statement manually may possibly accumulate errors and consume a lot of time. -Tension between management like that one of accountant and Finan ce Director may discourages internal relationship and cooperation(team work).The company will suffer since by the time they are obliged to discuss something importee(a) they will deliberately become pig-headed.OPPORTUNITIESTHREATS-Customers are helped to have no history of poor payments so this may enhance the reliability of customers to the company and more customers will be attracted gradually. -There is an opportunity of training staff meaning by the time of completing those studies they will bring capacious input that is acquired from outside. -Inkwell Ltd is given an opportunity by suppliers to pay a bit late and this will help Inkwell Ltd to use the money that was to be paid for other like to pay overdraft if there is any. This will also improve cash position-Data Protection Act 1998-Inkwell Ltd is likely to face penalties of failing to keep records since it has the tendency of not keeping records. -Family commitments-Some employees may have family commitments that force the m to take some breaks like when family members e.g. when children are sick. This will mean task at work will have to wait especially when company does not have assistants. Some will even take sick leave. -The use of unqualified staff is a huge threat since customers may possibly report that they are not given complete service that match with what they have paid for. This may be reported to consumer personal business and Inkwell Ltd might be penalized.-Power cut may provoke the loss of vital information and Inkwell Ltd may fail to present relevant wanted by external stakeholders e.g. banks so in this way the company may miss so many chances of opportunities or either be penalized for failing to present information to be used for legal purposes. -There is possibility of theft to take place in the company since Inkwell Ltd is generating a lot of money. -Trading via online might possibly become because its a great risk since some may claim to become part of Inkwell Ltd so that the y may receive money that was not entitled to them.APPENDIX 4-INKWELL (LTD)S TECHNICAL NOTES1) Income Statement-In the context of Inkwell Ltd this will show the owner of the business, sales revenue/income received as well all the cost incurred in the accounting period which will be deducted from the income to arrive at the profit of Inkwell Ltd.This will help the owner to make right decisions and analysis as costs and revenue that has huge impact in the income statement will be highlighted.2) Statement of Financial Position-Current, non current assets, short term liability and long term liability like loans will be laid down. All liabilities will be added and deducted from all assets for which the amount should be equal to the capital invested in the company by the owners and profit from Income Statement. This will help in terms of planning of how long will the liabilities be paid and when to look at non current assets, how to control receivables.3) Fraud Detection- The use of regul ar checking and investigating all discrepancies to conclude what could have went wrong can be one way of detecting fraud. forensic accountants can as well be useful where investigations will be carried out scientifically. Effective procedures and strategies that are meant to eradicate fraud can be useful in the organization so owners and employees will not want to be associated with fraud cases.4) reach of fraud-Fraud can become strong normally if its done by the owners of the business, this will include theft of cash, inventory as well as time meant for businesses purposes, owners and employees may use business time for their personal activities and this will reduce profitability, production, and effectiveness in the company. Fraud can become a way of life for a business where trustworthy within the business is eroded. Some will be scared of whistling blowing if they are not protected.