Fundamentals of Auditing

                                Table of Content

Description                                                                                Page no

1. Identifies and explain FOUR weaknesses in that system                                2

2. Explain the possible effect of each weakness                                        3

3. Provides a recommendation to alleviate each weakness.                                3

4. Reference                                                                                           5                

1). Identifies and explain FOUR weaknesses in that system;

i. Weakness

During working shift hours, the employees should start work at 7.00am and either use electronic identification card or punch card. As the employees will not work without logging in, therefore, it is not monitored on the time recording system.

Effect

There is a chance of other employees to help out their colleagues by logging in on their behalf which is unethical and risky.

Recommendation

The best way is to have finger print machine. Thus, other employees in the company would not be able to help their colleagues in their absence. Somebody should be assigned to monitor the logging in and use of cctv would be useful for further monitoring

ii. Weakness

The extent of any over time working although the supervisor ensures workers is not taking unnecessary things which would automatically increase the amount.

Effect

There is a potential risk of the employees clocking out late and claiming to work overtime while their intension is earning extra through overtime

Recommendation

There should be at least more than one supervisor to monitor the employees and their actual duties in terms of overtime and make sure no excess payment goes out to them unnecessarily

iii. Weakness

Domestic card has a code word which is for the company and is only known in that particular department.

Effect

As everyone ha the access to the code word, they are able to make changes on the names and payment details which are related to wages.

Recommendation

Only one personnel should be given the authority to control the code word.

iv. Weakness

The clerk authorized and makes the payment to the employees using APPM bhd online banking system.

Effect

As the clerk is very new to the company, with insufficient experience to authorize and do any kind of payments.

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