Internal Control of Woolworth
Executive Summary
The following report relates to the internal controls of Woolworths, and will look to describe and analyse them with the use of flow charts. The report will then move onto give details of an audit program that has been designed to test the internal controls of Woolworth’s accounts payable. Moreover, possible ways of how controls could be overridden as well as how the overall system could be realistically improved will also be discussed within the report.
Business Introduction
Woolworths is a supermarket chain situated within Australia and New Zealand and is owned by Woolworths Limited. Established in 1924, as a single basement store in Sydney Australia, Woolworths has become the largest food retailer within Australia, and second in New Zealand. This year marks Woolworths 25th anniversary with their pledge to being Australia’s ‘Fresh Food People’ and have abided by this pledge by continually sourcing the freshest produce from Australian farmers.
Internal Control System
Fixed Assets:
The flow chart in Appendix 1 illustrates Woolworth’s internal controls for fixed assets. Fixed assets are serviced and cleaned on a regular basis in order to maintain them. This can be illustrated in the deli department, where slicers are required to be cleaned every four hours. This ensures that the slicer does not have any residual pieces of food that could prevent the slicer from functioning effectively. In the event there is problem with fixed assets, the matter is immediately reported to management. Management assess the asset and determine whether they themselves can fix the asset, or if a repairer is required. If the asset cannot be fixed right away, a danger tag, or out of order sign is placed on the asset until it can be fixed. For instance, if a self-serve register is not functioning, out of order signs are placed on them.
Inventory:
As shown in Appendix 2, inventory is purchased using the AUTOSTOCKR system. AUTOSTOCKR is an inventory system that
The following report relates to the internal controls of Woolworths, and will look to describe and analyse them with the use of flow charts. The report will then move onto give details of an audit program that has been designed to test the internal controls of Woolworth’s accounts payable. Moreover, possible ways of how controls could be overridden as well as how the overall system could be realistically improved will also be discussed within the report.
Business Introduction
Woolworths is a supermarket chain situated within Australia and New Zealand and is owned by Woolworths Limited. Established in 1924, as a single basement store in Sydney Australia, Woolworths has become the largest food retailer within Australia, and second in New Zealand. This year marks Woolworths 25th anniversary with their pledge to being Australia’s ‘Fresh Food People’ and have abided by this pledge by continually sourcing the freshest produce from Australian farmers.
Internal Control System
Fixed Assets:
The flow chart in Appendix 1 illustrates Woolworth’s internal controls for fixed assets. Fixed assets are serviced and cleaned on a regular basis in order to maintain them. This can be illustrated in the deli department, where slicers are required to be cleaned every four hours. This ensures that the slicer does not have any residual pieces of food that could prevent the slicer from functioning effectively. In the event there is problem with fixed assets, the matter is immediately reported to management. Management assess the asset and determine whether they themselves can fix the asset, or if a repairer is required. If the asset cannot be fixed right away, a danger tag, or out of order sign is placed on the asset until it can be fixed. For instance, if a self-serve register is not functioning, out of order signs are placed on them.
Inventory:
As shown in Appendix 2, inventory is purchased using the AUTOSTOCKR system. AUTOSTOCKR is an inventory system that