Skye Antiques Ltd operates a large shop in the centre of North Bromwich and two smaller shops in Adjacent towns. They sell expensive reproduction antique furniture. Normally customers see the furniture in the shop and place an order for delivery in the company van within four weeks. The delays occur because each sale results in a purchase order for one of the suppliers. On placing the order, the customer pays by cash, cheque, credit card or signs a hire purchase agreement. There are four sales assistants, a van driver, and a cashier in the shop.

The smaller shop has a manager who deals with all the paperwork and part-time staff who assist at busy times. Customer orders are sent through to the main shop for sending to the supplier. Receipts from customers are banked lately – weekend receipts being banked on Monday – and duplicate sales invoices are also sent to the head office. Tills for any cash sales are cashed up daily and the cash sheet is agreed to till roads. Managers must sign the receipts. Accounting and purchasing are done centrally by the manager and the part-time bookkeeper.

The three directors all have other businesses and review the company operation once a month at an all-day board meeting.

Discussion

-Devise an internal control system for the shops.

-Relate your system to the definition of internal control.

-Identify the types of internal controls in your system.

Answer rating: 100% (QA)

To devise an internal control system for Skye Antiques Ltd we will focus on ensuring the reliability of financial reporting safeguarding of assets and compliance with applicable laws and regulations T... View the full answer