Internal Control of Woolworth

1544 words 7 pages
Executive Summary
The following report relates to the internal controls of Woolworths, and will look to describe and analyse them with the use of flow charts. The report will then move onto give details of an audit program that has been designed to test the internal controls of Woolworth’s accounts payable. Moreover, possible ways of how controls could be overridden as well as how the overall system could be realistically improved will also be discussed within the report.
Business Introduction
Woolworths is a supermarket chain situated within Australia and New Zealand and is owned by Woolworths Limited. Established in 1924, as a single basement store in Sydney Australia, Woolworths has become the largest food retailer within Australia,
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* Rebates. * Co-op.

If goods are what were ordered and no above problems occur, the Cash office personnel processes the approved invoices and make payments to suppliers via EFT. Last but not least, Woolworths develops an ongoing service section called Wowlink which is for the collaboration and communication with its suppliers. Suppliers have online access to enquiry and any issues relate to purchasing can be dealt with on this online platform. Audit Program:
This audit program is designed to test the internal controls of Woolworths’s accounts payable. It sets out details as to gaining an understanding of Woolworths and its related internal control system; assessing the relevant risks by identifying what can goes wrong (WCGW) and certain procedures used to collect sufficient extent of evidence (ASA330 ISA330).
After gaining a basic understanding of Woolworths’s accounts payable control system from above section, it is found that Woolworths has a mature account payable control system and also long-term stable cooperation with most of the vendors. However, some procedures also show they might contain a higher risk. In order to increase the audit efficiency, a Lower assessed level of controls risk approach is used (ASA300 ISA300).
The first potential risk should be noticed is related to invoices. Though Woolworths prefer electronic invoices but a minority of hard copy invoices is still being accepted. Those invoices might have different format


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