APPENDIX 1 MANAGEMENT RESPONSE

WEAKNESSESS The company did not properly implement the segregation of duties within the account department.

OUR FINDING One of the significant evidence is Gemilang payment cycle whereby the person who prepares the cheque and payment voucher is the same person and the same person also who matches the purchase invoices with the purchase orders.

OUR RECOMMENDATIONS

Gemilang not showed any evidence that it has established and implemented appropriate internal controls to safeguard the company finished goods.

The person who prepares the cheque and payment voucher should be done by only one person. For matches the purchase invoice with the purchase orders should be done by other person. The management should segregate the duties among their staff and must clearly stated. The movement of the finished goods are not The company should consider to hire or properly monitored and recorded. promoted any of their employee to act as store keeper or to be responsible to watch the flow of finished goods and to start a suitable documentation as a supporting evidence.