Final Project AAT 
INKWELL LTD
An investigation into the Accounts Receivable Ledger and The Internal Control System
CONTENTS PAGE
1. Terms of Reference Page 3
2. Executive Statement Page 4
3. Methodology Page 6
4. Introduction to the Organisation Page 7
5. The Review of the current Accounting System Page 10
6. The weaknesses of the current Accounting Systems Page 25
7. Recommendations for improving the System Page 30
8. Appendices Page 35
1. TERMS OF REFERENCE
1.1
The report has been prepared to cover the requirements of the AAT Unit “Internal Control and Accounting Systems”.
1.2
The objectives of the report are to analyse the accounting function at Inkwell Ltd and to identify any weaknesses, so that recommendations for the implementation of a new and improved system can be put in place, in order to minimise errors and to prevent fraud.
2. EXECUTIVE SUMMARY
2.1
The aim of the report is to analyse and evaluate the current internal control system and accounts receivable ledger of Inkwell Ltd.
2.2
The findings of the investigation highlighted the flowing weaknesses:
The Retail shops use stand-alone computers which are not connected to the network.
Lack of security measures put in place to safeguard the sensitive personal data held on individuals, and non-compliance with the Data Protection of 1998.
Non-compliance with company policy, as updates only carried out once per day. Data lost due to infrequent back-ups are costly in both time and money.
The retail shops have a sloppy approach to cash management. Cash only banked twice per week.
The company does not produce or provide any instruction and help guides, which employees can refer to in order to find help and advice.
The company do not have contingencies in place for staff absences due to illness or annual leave
There is no encouragement for employees to attend training courses.
Passwords used are not sufficient to maintain an adequate level of
An investigation into the Accounts Receivable Ledger and The Internal Control System
CONTENTS PAGE
1. Terms of Reference Page 3
2. Executive Statement Page 4
3. Methodology Page 6
4. Introduction to the Organisation Page 7
5. The Review of the current Accounting System Page 10
6. The weaknesses of the current Accounting Systems Page 25
7. Recommendations for improving the System Page 30
8. Appendices Page 35
1. TERMS OF REFERENCE
1.1
The report has been prepared to cover the requirements of the AAT Unit “Internal Control and Accounting Systems”.
1.2
The objectives of the report are to analyse the accounting function at Inkwell Ltd and to identify any weaknesses, so that recommendations for the implementation of a new and improved system can be put in place, in order to minimise errors and to prevent fraud.
2. EXECUTIVE SUMMARY
2.1
The aim of the report is to analyse and evaluate the current internal control system and accounts receivable ledger of Inkwell Ltd.
2.2
The findings of the investigation highlighted the flowing weaknesses:
The Retail shops use stand-alone computers which are not connected to the network.
Lack of security measures put in place to safeguard the sensitive personal data held on individuals, and non-compliance with the Data Protection of 1998.
Non-compliance with company policy, as updates only carried out once per day. Data lost due to infrequent back-ups are costly in both time and money.
The retail shops have a sloppy approach to cash management. Cash only banked twice per week.
The company does not produce or provide any instruction and help guides, which employees can refer to in order to find help and advice.
The company do not have contingencies in place for staff absences due to illness or annual leave
There is no encouragement for employees to attend training courses.
Passwords used are not sufficient to maintain an adequate level of