Audit Case Study -- Cheese

Audit Case Study -- Cheese Please Ltd. Question A: Internal control weaknesses The internal control at Cheese Please Ltd. is marked by five distinct weaknesses, as follows: The control process is constructed predominantly on the assessment of the employee working hours. The amount of time they put in, the hours they are present on the job and so on. The emphasis of the control procedures as such resembles a policemen style of verifying the employees, rather than stimulating them and the performances.

The punch cards can easily get lost or forgotten in a different jacket, in the car, in a different purse, at home, they can get stolen and so on. The loss or misplacement of a single punch card can easily lead to control insufficiencies, delays and irrelevant results. It appears that the internal audit is insufficiently focused on safety in the workplace, which subsequently materializes in financial, reputation and otherwise loses. It centralizes organizational information and control, meaning as such that it implements uniformization and standardization.

These might not be perfectly applicable in all organizational instances and the results of the audit process might as such be irrelevant. 5. The control is extremely complex, which materializes in tedious work and decreased operational efficiencies. In order to reduce the organizational imposition of these weaknesses, the following suggestions are forwarded: 1. The diversification of control to include elements such as employee motivation, satisfaction or performance. This would improve organizational results by stimulating employee efforts and results. 2. The search for a different manner of keeping track of employee hours.

At this stage, it would be recommendable for the track system to be loosened and the employees to be granted more freedom and responsibility to complete their chores. 3. The widening of the audit functions to include other elements outside employee hours, especially safety conditions within the workplace. 4. The decentralization of the control processes in the meaning of data collection and processing at the individual level of each of the three plants.

This strategy would insure that the results are relevant and applicable in the context of the uniqueness of each plant. 5. The simplification of the control processes with the direct impact of decreased workloads for the personnel team and a sustainable increase in operational efficiency. Question B: Internal control relevant for audit process The organizational audit encompasses the totality of controls to ensure that the company is operating within the legally imposed standards.

The first step in this assessment is represented by the internal control, which is conducted by parties internal to the organization and who will focus on a multitude of elements considered of importance. But before the Statutory Auditor can.