There is no finance department, and some
tasks by the finance staff are done by the
accounting department staff.
There is no established formal
organizational chart for the company.
It is needed to establish the finance
department separate and distfrom the
accounting department for they take
different roles and responsibilities in the
carry-on of the business. Some tasks done
by the finance staff may not be appropriate
to be done by the accounting staff and vice
versa. For example, for disbursement
purposes, accounting department is not
responsible for the processing of cash
disbursement to be approved by the
controller. Accounting staff may not be
appropriate to the procedures. It must be
done by the cash disbursing officer under
the finance department.
For clearer understanding of the business
tasks, it is also appropriate that each
employee knows what exactly should he
perform and on what line of authority
should he report and be supervised. Part
of the business strategy of any business
entity is to create an organizational chart
for the achievement of its mission and
vision. Each authority has his own job to
ensure that business objectives are
regularly performed in a systematic way.
Without the organizational chart, it may be
hard for the company who will settle
certain business issues and conflicts that
may arise.
The company takes time to reconcile the
items including cash count due to several
paper documents and records related to it.
The owners of the corporation handle
certain duties that may not be
appropriately related to them.
Inventories are not properly segregated
into different divisions such as restaurant
and functions and events.
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It is necessary for the company to create
its own electronic system to minimize
paper costs and to be effective and
efficient its daily operations. The risk may
arise if these documents may get lost,
misplaced or stolen by anyone who
desires to make fraudulent act. Thus,
reconciliation will even be more difficult
due to lack of documents showing proof
that certain transaction has really
occurred.
Though the owner takes control of the
business management on a day-to-day
basis, there must be a proper personnel
assigned to specific tasks to avoid conflict
of interest and to observe segregation of
duties. Segregation of duties is one of the
bases to know the level of internal controls
established by the company. There may
be certain risk that may arise in the
company such as conflict of interest if
duties are not segregated appropriately.
The company has to segregate their
inventories to account for costs spent for
each division and they have to maintain an
inventory level to required minimum point.