BANKING ACADEMY, HANOI

BTEC HND IN BUSINESS (ACCOUNTING)

ASSIGNMENT COVER SHEET
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UNIT TITLE
ASSIGNMENT TITLE
ASSIGNMENT NO
NAME OF ASSESSOR
SUBMISSION DEADLINE

Unit 11: Financial Systems and Auditing

SHOEBOX Footwear Limited Accounting and Management
Control Systems
1 of 2
Dr. Ha Le

We __________________________ hereby confirm that this assignment is our own work and not
copied or plagiarised from any source. We have referenced the sources from which information is
obtained by us for this assignment.

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FOR OFFICIAL USE

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Assignment Received By:

Date:

Unit Outcomes
Outcome

Evidence for the

criteria

Feedback

Assessors decision
First
Attempt

Understand
the
importance
of keeping
effective
accounting
systems
within a
business
LO1

Be able to
analyse the
management
control
systems of a
business

Explain the
purpose and use
of the different
accounting
records

1.1

Assess the
importance and
meaning of the
fundamental
accounting
concepts

1.2

Evaluate the
factors which
influence the
nature and
structure of
accounting
systems

1.3

Identify the
different
components of
business risk

2.1

Analyse the
control systems
in place in a
business

2.2

Evaluate the risk

of fraud within a
business, and
suggest methods
for detection

2.3

Internal
Verification

Rework

LO2

Merit grades awarded

M1

M2

M3

Distinction grades awarded

D1

D2

D3

Outcome

Evidence for the

criteria

Feedback

Assessors decision

Internal
Verification

Assignment
( ) Well-structured; Reference is done properly / should be done (if any)
Overall, youve

Areas for improvement:

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SCENARIO SHOEBOX Footwear Limited

SHOEBOX Footwear Limited is a fast-growing client of the firm of Accountants and
Registered Auditors where you have been employed for the past two years as an
audit senior. The company is located in an industrial estate on the outskirts of the
Hanoi city where your firm is based.
Although it is now a manufacturer of middle range footwear, using modern
equipment and materials, the company has been in existence for some 30 years.
It had become, however, in its later years, a struggling supplier of materials and
components to the footwear manufacturing trade, when it was acquired for a
modest sum by Chris Taylor, one of your firms clients, in December 2008. Chris
Taylor has been involved in footwear manufacturing for many years, latterly as
divisional Chief Executive of a multi-national group with extensive interests in the
industry. Following his early retirement, he saw the acquisition of SHOEBOX as an
ideal opportunity to put into practice some of the ideas which he had developed,
but had never had the opportunity to exploit.
The first two years following the take-over were difficult. The transition from
manufacturing components, to manufacturing the complete footwear products
was difficult to achieve. New designs had to be developed, some staff with
footwear manufacturing experience were recruited and manufacturing processes
were altered. All this had to be done at the same time as acquiring new
customers and phasing out the least profitable of the existing ones. Also, the
companys bank was concerned at the level of the overdraft and effective cash
management procedures had to be implemented.
A major plank in Chris Taylors strategy was to avoid head to head price-based
competition with the large national and international shoe retailers. He, instead,
established supply contracts with smaller, family owned, more traditional shoe
retailers around the country. They were immediately impressed by the range and
design of the shoes which were being produced and marketed under the Comfort
Zone brand. The prices charged by SHOEBOX whilst competitive, generated a
much higher profit margin than if they had been supplied to one of the large
retailers.
A further key marketing component was that each shoebox contained a small full
colour mail order catalogue of the full SHOEBOX Comfort Zone range of shoes.
Individual customers were then able to either request other shoes not currently
stocked by the retailer or to buy direct from SHOEBOX by mail order. This method
of increasing product awareness and availability proved very popular both with
retail and with direct customers and soon turnover and profit, both of which had
been static for a couple of years, began to improve.
According to the financial statements for the year to 31 March 2014, it is noted
that turnover has increased from the previous year by more than 80% and profit
before interest and tax by more than 120%. There is now no bank overdraft and
trade debtors are at their lowest ever level. Having attained what Chris Taylor
considers to be a sound basis for expansion, the company has recently launched
its internet sales platform. Already several thousand new customers have
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purchased shoes and they are already beginning to receive repeat orders.
At the same time, design and production facilities are being continuously
upgraded and the company has reached the stage where it can switch production
from one shoe design to another with almost no lost down time. It is Chris
Taylors intention to take the company to around $15 million per annum profit
position within the next couple of years and then seek a Stock Exchange listing.
In the longer term he sees the potential for repeating the expansion strategy in
Vietnam and selected countries in South East Asia. A crucial part of the plan will
be to establish an employee share purchase scheme, together with in
incentivisation programme involving performance related share option awards.
As far as the day to day operations of the company are concerned, Chris Taylor
adopts a very hands-on approach. He takes the final decisions about changes to
the product range, prices, production facilities and even major suppliers of raw
materials. He is heavily involved in all negotiations concerning purchases of new
manufacturing equipment and large raw material supply contracts. He is the sole
signatory on all company cheques, apart from small petty cash imprest
reimbursements, which can be signed by Roger Adkins, the Chief Accountant.
The company does not have a Finance Director, as Chris Taylor does not like
accountants, believing that they are too conservative, are would hold back the
pace of the companys development. The only other director is Kevin Barber, who
is in charge of production. Apart from Roger Adkins, Margaret Dongan, in charge
of product design, is the only other senior manager.
The companys computerised accounting system has struggled to keep up with
the pace of recent growth and urgently needs upgrading. Your firm has been
asked to provide advice as to which new system should be selected and to assist
with the installation.
Particular problems have been encountered in recent months with the
computerised stock control part of the system and Roger Adkins is concerned that
that final year end stock quantities could be materially wrong. For that reason, he
had to abandon his original intention of using the computer-produced figures and
had to have a full physical stock count carried out at 31 March. You personally
attended the stocktake and did some test counts of stock items at that time. You
were, however, not impressed by the stock counting procedures actually in place
and had to spend more time at the count than you had originally intended.
The accounting department is small, with only six members of staff apart from
Roger Adkins. Adkins himself does all the monthly bank reconciliations but
frequently has trouble in ascertaining from Chris Taylor details of large transfers
of funds to and from the normal Vietnam clearing bank account to the one located
with a bank in Hong Kong. It makes cash flow management difficult, but Chris
Taylor insists that the Hong Kong bank offers very good investment terms and
that he is convinced of the benefits. Adkins himself cannot see that the interest
received on the account is any different from what could be earned from the
Vietnam bank and often wonders why, for such a straightforward account, Chris
Taylor has to visit Hong Kong so frequently to discuss financial planning issues
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with the bank.

You have been discussing the upcoming audit with the manager responsible and
as a result you have been asked to write up a report to give answers to the
following questions. The report must be an integrated one, i.e. the report should
be coherent, linking from one section to the next section.

Tasks
Explain the purpose and use of the different accounting records

(1.1)

Assess the importance and meaning of the fundamental accounting concepts

(1.2)
Evaluate the factors which might influence the nature and structure of
accounting systems
(1.3)
Identify the different components of business risks

(2.1)

Analyse the control systems in place in a business

(2.2)

Evaluate the risk of fraud in a business and suggest methods of detection

(2.3)

GRADING
Pass

is achieved by meeting all the requirements defined in the assessment

criteria. (Refer page 2 of the assignment brief)

Merit

Identify and apply strategies to find appropriate solutions.

(M1)

Characteristics / Possible Evidence Relevant theories have been

applied to explain the purpose and use of the different accounting
records and assess the importance and meaning of the fundamental
accounting concepts.
Select/design and apply appropriate methods/techniques

(M2)

Characteristics / Possible Evidence A range of methods and

techniques have been applied in evaluating the factors which influence
the nature and structure of the accounting system.
Present and communicate appropriate findings

(M3)

Characteristics / Possible Evidence An appropriate structure and

approach have been used to write a professional report as well as a
range of methods of presentation used widely.
Distinction Use critical reflection to evaluate own work and justify valid conclusions (D1)
Characteristics / Possible Evidence A synthesis has been used to
identify the different components of business risks.
Take responsibility for managing and organizing activities

(D2)

Characteristics / Possible Evidence Work shows evidence of

substantial investigations have been planned, managed and organized
to analyse the control system in place.
Demonstrate convergent/lateral/creative thinking

(D3)

Characteristics / Possible Evidence: There are ideas generation and

decisions taken in evaluating the risk of fraud and suggesting method
of detection in the given business situation.

PRESENTATION
1. The assignment should have a cover page that includes the assignment title,
assignment number, course title, module title, Lecturer/tutor name and
students name. Attach all the pages of assignment brief/cover sheet with your
report and leave them blank for official use.
2. Ensure that authenticity declaration has been signed.
3. This is a group assignment.
4. Content sheet with a list of all headings and page numbers.
5. A fully typed up professionally presented report document. Use 12 point Arial
or Times New Roman script.
6. Your assignment should be word-processed and should not exceed 3,000
words in length. A CD should be included with references and accompanying
notes.
7. Use the Harvard referencing system.
8. Exhibits/appendices are outside this limit.
9. The assignment should be not contain a bibliography but should contain a
list of any references used in the assignment.
NOTES TO STUDENTS FOR SUMMISSION

Check carefully the submission date and the instructions given with the
assignment.

Ensure that you give yourself enough time to complete the assignment by the
due date.

Do not leave things such as printing to the last minute excuses of this nature
will not be accepted for failure to hand-in the work on time.

You must take responsibility for managing your own time effectively.

If you are unable to hand in your assignment on time and have valid reasons
such as illness, you may apply (in writing) for an extension.

Failure to achieve a PASS grade will results in a REFERRAL grade being

given.

Take great care that if you use other peoples work or ideas in your
assignment, you properly reference them in your text and any bibliography.

NOTE: If you are caught plagiarising, the University policies and

procedures will apply.