In: Accounting
a. Here, in this case, the misbehavior is done by one of the
employees of KKL consultancy. This behavior will have a long term
impact on the reliability of the consultancy unless it is solved
without damage. The case is already under hearing process.
Develop your answer with the following jey points.
- Under this critical situation, it is advisable that, KKL
authorities should repay the amount given by Mazin, that is,
OMR10,000, along with a reasonable amount of compensation. Hence,
the case can resolved by outside settlement.
- Adequate steps should be taken to punish and terminate from
service, the employee who conducted this act.
- A press release also can be conducted informing the public about
the issues and appolagising for the same. It will help the
consultancy to rebuild customer's confidence and trust, some
extent.
- There is should be proper internal control system fo managing
and monitoring the affairs of employees and workers. The feedback,
reporting system of the organization should function well.
-Without internal controls, a business operates inefficiently, in
an unreliable manner and out of compliance with applicable laws and
regulations.
- High rates of customer dissatisfaction, poor performance of staff
and lack of lucrative business partnerships reflect a business that
lacks direction and focus.
Waste, inefficient use of resources, poor management decisions,
high rates of productivity errors, loss of records, carelessness
and mistakes generally demonstrate poor business practices and
ineffective management.
b. We can observe the following gaps in the internal control
system.
- Lack of formally established executive management team to monitor
the affairs.
- Lack of proper documentation, maintenance or periodical reviews
of various aspects that would support the internal controls.
- Lack of ability of internal control system in addressing all
forms of fraud, including threats that could potentially be coming
from inside the organization.
Following measures can make the internal control system more
effective and productive.
- Framing written goals and objectives including, operational
objectives, Financial reporting objectives, Compliance objectives,
etc.
- Ensure that, Internal controls benefit rather than encumber
management.
-Internal controls make sense within each organization’s unique
operating environment.
-Internal controls are woven into day-to-day responsibilities of
managers.
-Provide accountability
-Encourage sound management practices
-Encourage proper resource management.
-Control policies and procedures must be established and executed
to help ensure that management directives are carried out.
- Establishment of strong information and communication systems to
enable the organization’s people to capture and exchange the
information needed to conduct, manage and control its
operations.
-Schedule monitoring on a regular basis
-After implementing internal controls, organizations must monitor
their effectiveness periodically to ensure that controls continue
to be adequate and continue to function properly.