Gaboria Frank is the owner of Frankincents Machining Limited, a custom machining centre with 10 full-time employees and a part-time bookkeeper, Norma, who comes in two days a week. Norma convinced Gaboria to purchase a small business suite of accounting packages and a desktop computer with a laser printer. Norma has set up the records on the computer, and all accounting work is now handled using the accounting packages (i.e., order entry, accounts receivable, cash disbursements, general ledger, and payroll). It took Norma about three months, and she initially had some difficulty balancing the subsystems, but everything seems to be functioning properly now. Frank did not consult with you, his accountant, prior to implementing the systems.
REQUIRED
a. Identify the risks associated with the current method of handling accounting records at Frankincents Machining Limited.
b. Identify those activities that Frank should handle in sales, accounts receivable, cash disbursements, and payroll. Explain why.