Assignment 1

Group Assignment
NAME MATRIC NUMBER

Jaganish 2****

Moga 2****

Thivi 2****

Thane 2****
CYCLE:
REVENUE AND CASH RECEIPTS

COMPANY NAME : SHOCKELAT

Company name : Shockelat Enterprise
Founder of Shockelat Enterprise : Mohd Fudhail Bin Abdul Razak.
Age :23 years old ( currently pursuing degree in tourism management at University Utara
Malaysia)
Business structure : sole proprietorship
Established date : this year March
Location of business : Varsity Mall Sintok, Kedah.
a)To evaluate the basic business activities and related data processing that are performed in the
revenue cycle
b)To understand the revenue cycle
c)To investigate on how Shockelat accomplish their revenue activities in their daily business
routine
d)To identify the weaknesses that is currently exist in the sales orders and cash receipts
transaction process
e)To examine on how Shockelat utilize their internal control procedures to minimize the risk
through the weakness
First method : Interview
Second method : Observation
 Entities Activities

Cashier Cashier will receive the items from the customer over the counter.

Cashier Cashier will receive payment from customer.

Cashier Cashier prints out the customer receipt and handover to the customer.

Computer Updates cash balance.

Print sales summary.

Cashier brings cash drawer to the treasury room.

Treasury Content are reconciled against the internal tape.

PHYSICAL DATA FLOW DIAGRAM
b)Explain FIVE (5) weaknesses in the selected cycle and suggest and briefly explain
d)ONE (1) internal control procedure associated with each of the weaknesses identified.
WEAKNESS INTERNAL CONTROL

No specification job
 Lack of staff with no specific job description for each
Segregation of duties
person.

Inadequate documentation
 Financial documents should be pre-numbered to ensure
Proper documentation
all transactions are recorded and accounted for

No segregation of job
 Small businesses are susceptible to fraud by their own
Segregation of duties
employees as small businesses may have a few
employees with multiple roles.
Lack of physical security
 Lack of physical security of business assets and
Restriction to assigned people
resources could result in the loss or damage to assets
and resources.
Accounting system
 No proper accounting system to record transactions
Use an accounting system
that occur
c)Describe ONE (1) risk exposure from the internal control
weaknesses identified in the above.

The risk is accessing of merchandise inventory and other records by

unauthorized person. Therefore, the exposure is loss of security over
such records with possibly detrimental use made of the data
accessed. Thus, without a proper segregation of duties, this kind of
risk may occur in this business.
To find a suitable company with the required criteria’s
It was not easy to find and select a research place
Some company rejected us because they don’t have time to give interview.
The other problem and constraint faced by our group is time
•Shockelat is a well potential business that can lead in future even though the shop is just opened
in campus area.
•Through our interview and observation, we can clearly see that they providing a good service
and quality goods to their customers.
•Shockelat has some weakness that can be improved in order for a better growth of business. Our
group has point the weakness together with the internal control that can be carried out by the
company to be more perfect in future.