Borland Pty Ltd Case Study - Management Assignment Help

Assignment Task :

1. Borland Pty Ltd is a small proprietary company, which provides office cleaning service. The company is make up pf six shareholders, and the initial four employees receive 1% of the company and another 1% for each following year of employment.
 

2. ?a?If one of the cleaning employees calls on sick, they can arrange a friend to clean for them. Which would significantly affect the quality of the cleaning services as their friends may not be as professional as a full-time employees. No account is affected in the current period but it would affect the financial statements when they start to lose clients and revenue.
(b) There is no contract related to integrity between the company and the cleaning staff.According to David, if the cleaning staff decides to steal the confidential documents from the clients offices and sell it to the competitors of he clients, the company would suffer a loss. No account is affected in the current period but it would affect the financial statements when they start to lose clients and revenue.
 

3. Borland Pty ltd focused on the documentation, evaluation and testing of activity-level controls. Activity-level controls are just one component of internal control over financial reporting. In an evaluation of internal control, both management and the auditors need to consider all its components. If they focus solely on activity-level controls to draw a conclusion about all elements of internal control, they may reach inappropriate conclusions about internal control. Office staff Richard cannot be responsible for invoicing debtors management and collecting, receipts at the same time, which may cause high risks of the money being stolen.
 

4.(a) Cleaning consumables should be Borland pty ltd’s inventories not their expenses, and there is just one small storeroom for all cleaning consumables, which is hard to keep them from being stolen.  Inventory account and cleaning consumables(expenses) account could be affected. If something being stolen, revenue and cash account would bee affected as welll. Auditors should check disclosure because of classification, accuracy, valuation and allocation.
(b)There is no invoice number, therefore,if one unpaid invoice is lost and  nobody will know it. Cleaning revenue account should be checked for completeness.

5. (a) Auditors would take a sample when they audit large companies due to the massive of their transactions and invoices,but they are able to check all of the transactions and invoices when auditing small companies. 
(b)Small companies would occurs a higher inherent auditing risk due to staff and other resource constraints compared to large companies.
 

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