Portfolio

Instructions:
• There are four tasks to complete. Please use the number of words and marks for each task to guide you in completing the assessment.
• The portfolio should be an independent work, have clear evidence on the understanding of the relevant concepts and clarity and conciseness of written work.
• Use a reasonable range of academic sources to support your ideas wherever possible in each task using Harvard reference Style and provide a complete reference list at the end of each task.
• The number of words for each task exclude the reference list.

Task 1 [1000 words]
Jim Howe has worked for Dr Pat Dorsey for several years. Jim demonstrates a loyalty that is rare among employees. He hasn’t taken a vacation in the last three years. One of Jim’s primary duties at the medical office is to open the mail and list the cheques received. He also takes cash from patients at the cashier window as patients leave. At times it is so hectic that Jim doesn’t bother with giving each patient a receipt for the cash paid on their accounts. Instead, he assures them he will see to it that they receive the proper credit. When the traffic is slow in the office, Jim offers to help Sue post the payments to the patients’ accounts receivable. She is always happy to receive his help because he is a very conscientious worker.

Questions
• Identify any principles of internal control that may be violated in this medical office situation. (10 marks)

• What is an internal audit? How it is different from the external audit. Explain in detail using academic sources. (15 marks)

Task 2 [1000 words]
Identify an organisation from the list of companies (attached document) provided on the canvas topic whose procurement strategy and processes interest you. Ensure that you can gather relevant information to complete this task.

Question
What procurement strategy has the case organisation adopted? Why have they adopted this strategy? (10 marks) Identify the geographical strategy, their supplier base, and centralised or decentralised

Procurement sourcing strategies that can be classified into the following categories:
 number of suppliers (single, dual, and multiple sourcing);
 geographical supplier distribution (local, national, international, and global sourcing);
 centralised and decentralised strategies
 Add information of procurement sourcing strategy you found about your case organisation. You can find direct information or infer this information by looking at :
 Need of different types of material for manufacturing business might require different suppliers.
 Whether company is purchasing from local, national or international supplier. Or doing business locally, nationally or internationally. Some organisation localised production in one country, but the distribution network is global.
 Is this a large organisation with subsidiaries, independent branches locally or internationally?

• What relationship does the case organisation facilitate with their suppliers? (8 marks)

• What organisation performance objective is achieved using their procurement strategy? (7 marks)

Task 3: [1000 words]
Part (one).
• Budgeting can be an essential management tool if appropriately implemented. Identify the positive results when budgets are used properly. Conversely, since budgets affect people, identify the negative aspects if budgets are not implemented properly. (12 marks)

Part (two).
The managing director of Business Magazine Ltd has recently introduced a budgetary control system. The accountant drew up budgets for the advertising and editorial departments based on the actual results for the last three years. At the end of the first month of the new financial period, the actual income was higher than planned, but the actual total advertising department costs were higher than budgeted. However, the actual costs for the editorial department were the same as those budgeted, and the actual profit for the period was higher. On receiving the first month’s results, the managing director threatened to dismiss the advertising manager for exceeding the budgeted costs. The advertising manager responded by saying that he would resign unless the budgetary control system was scrapped. The accountant left to join another company.

Questions
• You work for the consultant firm that has been asked to advise the company. Prepare a preliminary report covering the guidelines for the operation of a successful and effective budgetary control system, including the recommendations as to what action the managing director of the client company should take. (13 marks)

A summary of the budgetary control process is as follows:
• Set budget at beginning of year. Either divide annual figures into 12 to give monthly budget amounts for every line of income and expense where costs or income are evenly spread or assess on a monthly basis.
• Record the controlling profit centre along with each of the actual financial transactions, both income and expenses by cost element
• Report actual results to profit centre managers on a monthly basis in a format that enables them to compare the actual figures to the monthly budget figures
• Identify “variances” by deducting the budget figure from the actual figure for each line of the monthly progress report (i.e. actual – budget)
• The cost centre/department manager has the responsibility to investigate the variances on his/her report to find out why they occurred, and to report the findings to senior managers/finance director/board of directors
• Act on findings – if there is an issue such as poor-quality materials or a need for staff training this needs to be taken forward. However, it may be that either the budget was set at an unrealistic level or circumstances have changed significantly since the budget was set (e.g. a hike in the price of raw materials), and it may be more appropriate to change the budget to a more accurate figure for future months
• The monthly budget report with its variances is an example of “management by exception” – management can concentrate its efforts on the problem areas highlighted, so this is an efficient use of management time.
• Fixed budget shows the planned result for a single planned level of activity
• Flexible budget shows planned results for a number of different levels of activity

Task 4 [1000 words]
Question part (a) (approx. 400-450 words  10 marks

• In part (a) of task 4 it is expected from the students to show an understanding of the ratio analysis and its interpretation plus an understanding of the financial statements elements that are profit and cash and how these are different from each other by using difference examples.

• Discuss both scenarios of profitability ratio and difference between cash and profit with relation to the case study