The following report offers our initial findings from our review of the Operations, Internal Controls and Accounting Information Systems at Nelson's Pharmacy. We have reviewed Nelson's Pharmacy's procedures and have conducted preliminary interviews with yourself and the employees. Our findings are detailed below.
Identified Issues/Problems
While there were several concerns with respect to the operations, accounts payable and information systems, three main areas for improvement have been identified. The information system requirements, accounting procedures and internal controls are the areas where improvements would provide the most benefits to your store.
Information System Requirements
We understand that Fast-Books is currently being used to manage the company's accounting information needs. There is no mention of whether or not backups of the information stored in this computer are being made and how frequently. If the computer were to break down and the information was not retrievable, all the accounts receivable information would be lost and it would be up to Mrs.
Nelson to determine outstanding balances if no backs up were available.
As your current information system is a single user system, the addition of an additional computer in the office would not allow more than one person to access or input data at a time. This could be a concern given the varying nature of the duties Mrs. Nelson and your son Gordon complete.
It was also noted that the standard chart of accounts is currently being used. Further review and discussion with Mrs. Nelson and Gordon would determine if the chart of accounts could be modified to better suit the needs of the company. Removing accounts that are not currently being used could help to clear up statements and reduce the risk of incorrect entries. Additions of accounts to separate department inventories, for example, could help in evaluating purchases and inventory...