Chicken Run

Chicken Run Case Leading Strategy | Analysis/Issue | Recommendations | Audit & Investigations | The account of Cold Gold Sdn Bhd has been outstanding for a substantial period of time and its amount is relatively significant. | * To address the problem, delay doing transaction with Cold Gold immediately. Request for payment first to avoid the amount to be more significant. If there is a need to extend the credit before they pay the amount, further authorization from the credit controller and top management is require. * If there are possibility that Cold Gold could not pay the amount, provision for doubtful debt must be provided. * In the future, EPM should make it a practice to monitor each customer’s credit limit. When a customer reached the credit limit, must asked for payment before doing the next transactions. * In addition, statement of account must be send to all customers on regular basis preferably monthly basis as a reminder and to inform them the amount they owed. This practice will also enable customer to reconcile the amount in the statement of account that EPM had sent to them with their records. By doing this, any differences will be solved immediately. | | Confirmation letters from customers did not tie up with balances in the accounts. | * There may be two reasons on the problem to occur: * Firstly because the accounts receivables was not maintain properly. For examples, payments from customers were not taken up in the general ledger. * Secondly, theft on cash collections. * To overcome the first problem, double check the invoices and official receipt kept by customers as well as matching them with the company’s record. Any dissimilarity should be reconciled. Ensure that proper account is being credited. If there is customer’s payment which have not taken up in the company’s account, ensure that its amount have been credited in their accounts. * To detect any differences, it is very important for the company to issue