Chapter 10
Capex system:
General weaknesses in cap/exp/revenue system:
1. Capital/revenue expenditure budget not being prepared and approved by the finance
director plus whole board.
2. No capital expenditure form prepared and signed by authorised personnel for the
purchase of fixed assets.
3. No quotation obtained from approved vendors
4. No purchase orders raised
5. No G.R.N made on fixed asset arrival
6. Fixed asset register not updated on arrival
7. No inspection of fixed asset on arrival
8. No capitalisation policy as per I.A.S 16
9. No physical controls of the fixed asset
10. No reconciliation between physical and recorded inventory of fixed assets at regular
intervals
Bonsai co.
a.) . control environment which includes governance and management function and the
attitudes, awareness and actions of those charged with governance.
. control activities are the policy and procedures which help ensure that
management directives are carried out.
. monitoring of controls which is a process to access the effectiveness of internal
control performance over time.
. Entity’s risk assessment process which includes how management identifies
business risks relevant to the preparation of financial statements in accordance with
the entity’s applicable financial reporting framework.
. information system
Capex system:
General weaknesses in cap/exp/revenue system:
1. Capital/revenue expenditure budget not being prepared and approved by the finance
director plus whole board.
2. No capital expenditure form prepared and signed by authorised personnel for the
purchase of fixed assets.
3. No quotation obtained from approved vendors
4. No purchase orders raised
5. No G.R.N made on fixed asset arrival
6. Fixed asset register not updated on arrival
7. No inspection of fixed asset on arrival
8. No capitalisation policy as per I.A.S 16
9. No physical controls of the fixed asset
10. No reconciliation between physical and recorded inventory of fixed assets at regular
intervals
Bonsai co.
a.) . control environment which includes governance and management function and the
attitudes, awareness and actions of those charged with governance.
. control activities are the policy and procedures which help ensure that
management directives are carried out.
. monitoring of controls which is a process to access the effectiveness of internal
control performance over time.
. Entity’s risk assessment process which includes how management identifies
business risks relevant to the preparation of financial statements in accordance with
the entity’s applicable financial reporting framework.
. information system
