BORDON,JULIUS BSA-3A

1.) Identify internal control measures that are imposed by the entity for the following: (1) Live
operations, (2) Dressing Plant and (3) Accounting

1.)Live Operations

1.1 Contractual Growing of broilers

Contractual Growing of Broilers is one of the most efficient way of conducting a business. Its not only cheaper
and more efficient instead of creating your own farms or searching farms to offer raw materials (broiler birds)
but it also promotes a great offer to local farm owners and it guarantees a regular and reliable supplies as it
will meet the specific requirements of the processing enterprises and it will also ensure the necessary amount
of raw materials (broiler birds) needed

1.2. Locations of the farm

The farm is located near from each other which is a good thing as it can be easily monitored by the technicians
and veterinarian that will ensure the quality of the raw materials and the effectivity and efficiency of the
machines and equipment used by the farming areas.

1.3. Technicians, Veterinarian and Harvester trucks

The route assigned for the technicians and the transportation provided to the veterinarian for his/her travels
helps the business to ensure its accuracy and to protect its resource against waste and efficiency

1.4. Loading Sheet

The loading sheet ensures the raw materials against fraud as it contains the the declared number of birds
loaded/harvested from each farm. The data it contains helps to ensure the accuracy and reliability of the
accounting data.

2.)Dressing Plant

2.1.Dressing Plant Location

It is important to designate the location of the dressing plant not only in the most reliable place but also to a
place where the products can be easily distribute to the distributors and possible target customers/distributor.
General Santos city is one of the best candidate as it is not only a charted city in the region but because of its
economic status. This ensures the immediate disposal of the products which avoids the impractical waste due
to spoilage.

2.2.Checker, Quality Assurance checker, on-call persons and Outbound Dispatcher

This employees ensure the quality, ensures that the business is free from fraud, and ensures the accuracy and
reliability of the accounting data. The checker, ensures that the number unloaded from the harvester trucks is
matched to the loading sheet to avoid fraud and pass it along with the inbound form to the quality assurance
checker to assure the quality of the birds. The on-call persons ensures the packaging of the dressed chickens
as it is passed to the outbound dispatcher which labels the bag number, weight, number of pieces of bag, total
weight, and total number of pcs to ensure the quality and efficiency of the product before passing the loading
slip to the distributor or his authorized van driver.

2.3. De-feathering machine

This machine achieves the maximum efficiency of the entity as it can de-feather 15 birds per minute ensuring
the efficiency of the process and the quality of the output as it is definitely faster when compared to manual de-
feathering done by a single person. It also saves a lot of man power provided by the on call personnels.

3.)ACCOUNTING

3.1. All sales are made in cash

This is one of the Internal control measure of the business as this will help the business to perform and the
business can used the cash acquired for additional improvementsofthe business and to pay the expenses. This
method improves the quality of the operations and it is amethod created by the business to avoid incurring bad
debts expenses as the business continue to operate.

3.2.Separate accountant for the cash receipts and disbursements

This ensures the efficiency and quality of the accounting data as it makes the job easier than having a single
accountant making the cash receipts and disbursements processes.

2.) Identify loopholes that weaken the internal control on the following: (1) Live operations, (2)
Dressing Plant and (3) Accounting. Explain how these affect the internal control measures set by the
entity.

1. Live Operation

1.1. Veterinarian

There are only one Veterinarian which doesn’t match according to the number of poultry farms and its far away
from each other which might create delay even if he have a company car used for his travels in case one and
another poultry farms needed the help of the veterinarian. This might affect the quality of the raw materials
produced by the poultry farm.

1.2 Harvester Truck driver as the holder of the Loading sheet

This might affect the quality of the accounting information and might create fraud because the truck driver is
not part of the company.

1.3 Incentives given to the farmer

The farmers might incur losses that might affect the future on the contracts in the future.It can also result to
shortage of supply in the raw materials needed for the dressing plant.

2. Dressing Plant

2.1 Quality Checker

The quality checker doesn’t check the birds according toits size before entering the dressing plant which might
affect the quality of the chicken distributed to the distributor.

2.2 Freezer

The entity lacks freezer. It’s not all the time that the can all dispose their products and without proper
equipment, it might cause spoilage or low value sales in orderto avoid spoilage.

2.3 Loading slip and other accounting forms

The entity needs to contain a copy of the loading slip for additional accounting information needed to maintain
the quality and reliability of the company’s accounting information.

3. Accounting

3.1 Not Accepting Credit Sales, only cash sales

You might lose a lot of customers because you competitive edge against your competitors that are accepting
credit. This might affect the future performance of the business as time goes by.

3.Suggest plans on how to improve the operations: (1) Live operations, (2) Dressing Plant (3)
Accounting, (4) Sales) and (5) HR. Suggestions should be as specific and well detailed as possible

1.Live operations

They need to employ additional veterinarian and organize the veterinarians location for its operation just like
what they did with the technicians. They also need to add additional employee or helper to come along with the
truck and secure the contents of their harvester truck to guarantee the quality not only of the broiler but alos
the quality of the accounting information on the loading sheet. And lastly, they also need to give additional
bonus to the farmer if they can meet the quota or minimize the additional expenses by taking care of the chicks
and chickens well in order to continue the contract making in the future operations.

2.Dressing Plant

The quality checker needs to recheck the chickens from the checker and organized them according to their
size in order to arrange the chicken according to their size and weight and help the customers to pick
according to their need. For example, a lechon manok business ordered a dressed chicken. If the sizes of the
chicken are different, the customer will have a hard time adjusting according to the size and weight of the
chicken which is inconvenient for them. This is to avoid loss of customer due to inefficiency of the products.
Next is they need to purchase a large freezer in order for them to avoid spoilage of products in case of delay
and other possible incidents that might happen. This will be a great help for them to avoid losses and improve
the quality of their product. And lastly they need to secure their source documents like specially their loading
sleep as this will help them project their sales and review the cash received the accounting if it matches the
amount of the loading slip.

3. Accounting

The entity also needs to accept credit sales. Credit sales  can also be a good way for businesses to draw in
new customers that may otherwise be put off by financial restriction. Credit sales will also help to retain
customers that will help the business to operate well as it will give them competitive edge with other similar
business entities. They also need to contain the accounting information from the source documents loading
sheet to the slip in order to review the following transfer and in case of fraudulent acts occurrence the one the
suspect can be traced easily.

4.Sales

The sales staff must adjust according to the customers demand and to control the chicken to be dressed every
harvest time. It must be scheduled according to the distributors quota. What if the distributor cannot totally
disposed all the chickens it would going to be a waste because they don’t have freezer to stock the products
with. If the entity cannot purchase a freezer yet, the sales agent must record the quotas of the previous sale
made by the distributors and match the chicken to be dressed each harvest to the distributors quota.

5. Human Resource

The Human Resource Department to hire additional personnel like the helper to the harvester truck to ensure
the safety and avoid fraudulent acts because the driver is not affiliated with the company. They also need to
support additional staff in the quality assurance checker to gradually guarantee the organization of the sizes of
the chicken and the quality of the product produce by the entity.