Kenya Cans Ltd.
i) Weaknesses in the system
– Lack of supervision.
There is no authorized employee to monitor and supervise the employees as they place scrap metal in large bins outside the workshop. The scrap metal is therefore prone to theft by staff
– Lack of authorisation controls
There is no staff to authorize the local scrap dealer when collecting the scrap metal from the bin.
– Incomplete recording system
There is no staff recording the scrap metal on being collected by local scrap dealer. Company is prone to losing income from scrap metal
– Collusion between gate keeper and scrap metal dealer
There is not staff to monitor the gatekeeper while weighing the scrap before it leaves the factory. The dealer is likely to collude with the dealer to conceal some income and defraud the company.
– Lack of accounting documentation
There is no recording system over scrap metals collected by dealer. The dealer is likely to deflate the cheques sent thereby defrauding the company of the income from sales.
– Collusion between scrap metal dealer and company cashier
There is no approval, authorisation and monitoring controls over the amounts received from dealer. Cashier is likely to collude with dealer to defraud company income.
– An efficient recording system to ensure proper documentation and scrap metal sales
– An upto date report on scrap metals sales on a monthly or weekly basis
– A specific qualified competent accountant positioned at the gate to monitor processing of the weighing and recording of scrap metal safes
– An upto date technology to be implemented for recording and weighing scrap metal
– A proper supervisory control system to ensure that gatekeeper, scrap metal dealer and cashier are supervised.
– Segregation of duties. There should be different staff for weighing scrap metal, recording and receiving cheques
– Confirming amount and recording in cheques