Professional Documents
Culture Documents
Contents
1. Executive summary.............................................................................................................3
2. Introduction.........................................................................................................................4
3. Background of the organization..........................................................................................5
4.1. History.........................................................................................................................5
4.2. Brands..........................................................................................................................6
4.3. Global network............................................................................................................6
5. Primary objectives of the accounting department...............................................................7
5.1. Importance of accounting and accounting department................................................7
5.2. Key objectives of accounting department...................................................................7
6. Staff of the accounting department (Hierarchy).................................................................9
7. Financial accounting workflow, process and procedures.................................................11
7.1. Introduction to financial accounting..........................................................................11
7.2. What is financial accounting.....................................................................................11
7.3. Scope of financial accounting...................................................................................12
7.4. Principles of financial accounting.............................................................................12
7.5. Types of financial accounts.......................................................................................12
7.6. Importance of financial accounting...........................................................................13
7.7. Financial statements..................................................................................................13
7.8. Process of the financial accounting...........................................................................16
8. Management accounting workflow, process and procedures..........................................18
8.1. What is management accounting and it importance..................................................18
8.2. Scope of the management accounting.......................................................................19
8.3. Management accounting process...............................................................................21
9. Auditing Function............................................................................................................22
9.1. Introduction to auditing.............................................................................................22
9.2. Auditing functions.....................................................................................................22
10. Internal control implemented and applied by the accounting department....................24
10.1. Introduction to internal control..............................................................................24
10.2. Internal control practice by nestle company..........................................................24
11. Challenges Encounter by the Accounting Department.................................................25
12. Conclusion.....................................................................................................................26
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13. References.....................................................................................................................27
14. Appendixes....................................................................................................................29
14.1. Appendix 01...........................................................................................................29
14.2. Appendix 02...........................................................................................................29
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List of figures
Figure 1....................................................................................................................................10
Figure 2....................................................................................................................................21
Figure 3....................................................................................................................................22
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1. Executive summary
This report has been based upon the role of the accounting department in nestle company
group. The company is mainly focused on the production of foods and beverages. In this
report it mainly concern about the role of accounting department of that particular selected
company.
This study brings the attention to the organizational background, its history, brands, global
network of the company and so on. Then considering the key objectives of the accounting
department and how those objectives help to overcome the organizational goals. Then
consider about the staff of the accounting department or the hierarchy of the particular
department. This report also provides an idea about the financial accounting, its importance,
accounting workflows, process and procedures in the accounting department. Then also
provides broad idea relating to the management accounting aspects and its importance with
special reference to the nestle company. Then this report provides idea relating to the auditing
functions. Under that readers will be able to have clear idea about what is audit function and
how the nestle company comply those audit functions in their day today functions. Apart
from that this report provides what is internal control system and how nestle company
practice those internal control system in their organization. Finally readers will be able to
have idea about the challenges encountered by the accounting department and how they
overcome from those challenges.
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2. Introduction
The purpose of this research is to determine the role of the Accounting Department in the
Selected Organization. To accomplish that given task this study is going to concern about one
of the reputed organization in the world. It is none other than nestle multinational company,
which is world’s largest food and beverage company. This study's primary objective is to
determine the role which is comes under the accounting department of that particular
company. Under this study this may focus on to the following criteria. First of all this gives a
broad idea to the readers about the selected organization and its background. Having a
thorough knowledge relating to the background of the selected organization will help out to
identify the tasks that the each department specifically performed to reach their goals and
objectives. Apart from that this will emphasize the primary objectives of the accounting
department. Each department has their own objectives which will lead to acquire the
organizational goals and objectives. Then this study will pave the road to have a clear idea
about the hierarchy of the accounting department of the organization. When consider about
the accounting can identify both financial accounting and management accounting. In this
study readers can define the processes, techniques and methods which are relating to both
management and financial accounting. Then most importantly the functions which are
relating to auditing of the specific organization will be discussed under this study. When
consider about a particular organization can identify the internal controls which are
implemented and applied in their daily tasks. Under this survey the readers can have a
thorough knowledge relating to the internal control implementations too. For any kind of
organization it is common to face for different kind of challenges. They might have
challenges from their competitors, customers, and supplier or from the economic conditions
too. In here basically consider about the challenges which are faced by the accounting
department. Facing such kind of challengers may generate negative impact to this particular
organization. How those challenges may affect and how to overcome those challengers may
also discuss through this study. All the above mention criteria will be discussed relating to
nestle international company and their accounting department. Through this study readers are
able to identify the importance of the accounting department and their support towards the
well-being of that particular company and their responsibilities, specific tasks and procedures
under the accounting department.
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3. Background of the organization
When consider about the background of the study that can be discussed through several
topics. In this section readers will be able to have a deep idea relating to the history of the
company, their global networks, brands and their sustainability goals. As first step it is
essential to have an idea about the history of the nestle company itself.
4.1. History
The Nestle Company got its start in 1866 when the AngloSwiss evaporated milk Company
established. In 1867, Henri Nestlé creates a revolutionary baby food, and in 1905, his
business unites with Anglo-Swiss to establish the Nestle Group. By 1905, Nestle & Anglo
Swiss operated more than 20 plants, and they were selling their products in places like
Australia, Africa, Asia, and Latin America. During the Belle Epoque, also referred to as the
"Beautiful Age," which comes to an end as World War One begins, the company is doing
well. The dairy business is now international. The decline in military milk consumption
following the war resulted in a major crisis for this world popular company in 1921. The
Wall Street Crash, which lowers customer purchasing power, has a negative impact on the
company's recovery. Despite its shortcomings, the period offers many advantages.
Professionalization of the company's management staff, centralized research, and the
introduction of innovative goods like Nescafé coffee are all positive changes. After years of
growth, Nestle closes down unsuccessful ventures. In accordance with its new "Nutrition,
Health and Wellness" strategy, it promotes brands that cater to the needs of consumers who
are more health-conscious. The business grows with the help of the in the US, Eastern
Europe, and Asia intention of gaining control of the global marketplaces for Ice cream, water,
and livestock feed. Nestle explains how it conducts business using the Taking a Shared Value
perspective. The introduction of the Nestle Cocoa plan and Nescafe plan will hasten the
development of supply networks that are ecologically friendly. The company begins to
concentrate on medical nutrition as it continues to fortify its place in long-term industries like
infant formula and frozen foods. Nestle keeps looking for new development possibilities
outside of traditional market segments, such as healthcare. It purchases companies like
Zenpep, Vital Proteins, and aimmune in addition to a controlling interest in Orgain, a pioneer
in plant-based nourishment. Along with increasing its commitment to recyclable packaging
and net zero emissions, the business also raises the bar on sustainability.
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4.2. Brands
When consider about the brands that nestle company holds under their name that can be
categorized into several areas. They do not limited to one area and they spread their products
and services in the following areas. Examples include baking, coffee, cooking, cooled and
frozen foods, beverages food preparation, health science, infant nourishment, pet care, and
premium water. Through these areas they spread their services and good to the customers.
Here are some examples for their brands. Nescafe, kitkat, milo, Maggie, aero are some of
them. According to their annual report following core figures can be grabbing out.
With 275,000 employees worldwide, Nestle is a truly global business. They manage more
than 340 factories across 77 nations and export their products to 188 various countries. They
have branches in North America, Latin America, Asia, Middle East and greater china. When
consider about the Asian region, with an office in Sydney, Australia, in 1908, they built their
first headquarters there. One-third of their workforce, representing over 110 different
nationalities, works in ninety seven of their plants as well as an R&D center facility in
Singapore that is crucial the development of new products and innovations. When thinking
about the area surrounding China, The firm has been active in the region ever since it was
founded as a condensed milk company in Hong Kong in 1874. Their first site was opened in
Shanghai in 1908. We now operate 22 factories, three R&D facilities, and five product
creation centers in Heilongjiang Province, where they first set up shop in 1980. Over 90% of
Nestlé products sold in Greater China, where presently have 26,000 coworkers, are made
locally. The activities of Nestle North America are located in the USA and Canada. They
have 105 facilities across 34 states and provinces in both countries, hire 33,000 people, and
have three research centers dedicated to R&D, health science, and pet care. Since the late
19th century, they have been in business in North America. Here is the brief introduction to
the selected organization which is named as nestle company.
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5. Primary objectives of the accounting department
When consider about a business entity whether it is a larger scale or medium or small scale
business accounting in much more important as it gives more benefits to that particular
organization and it helps to improve the decision making process of that particular
organization.
When consider about the nestle company here we can identify the importance of their
accounting department towards their business and the primary functions of their accounting
department. When consider about the nestle company it is such a huge and diversified
company. As it produce different types of products and it is a multi-national company. For
such company it is far more important to having such an accounting department. As a result,
the accounting department provides both financial assistance and accounting services to the
group it belongs to. The section keeps track of all other financial elements, including
accounts due and receivable, inventory, payroll, fixed assets, and so on. Each department's
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records are examined by the department's accountants to determine the company's financial
position and any adjustments required to run the business profitably. The objectives of nestle
company’s accounting department can be list out as bellow.
Do manage the timely payroll: The accounting division of nestle company is in charge
of maintaining and managing all payroll data for current employees. The provision of
correct payroll data and payments to employees is one of the objectives. Employee
earnings must be taxed before being distributed to the relevant employees. Despite
other urgent deadlines or tasks, the accounting department must strive to send out
these payments on time.
Do continuous track of all account receivables: Customers who owe money to the
business are listed under accounts outstanding. These include clients who purchase
goods from the company and businesses that retain its services on a regular basis.
Follow up on all unpaid accounts receivable means calling the clients to find out when
the payments will be made, which represents one of the objectives of all CPAs
employed in the accounting department. An invoice is created with a payment date at
the time of sale, but active businesses or people may need more time to pay. This is a
common objective of the accounting department to maintain the company's financial
stability.
Do addresses the budget changes: most of the time board members and executives
consider about how to increase the profit without harming the quality of the product.
In nestles company also they do this procedure. Because he is knowledgeable about
the company's finances, the accounting manager frequently offers his thoughts on
budgetary adjustments. One goal is to offer modifications and remedies that maintain
the business financial security to make sure that the finances still has a healthy despite
the changes; a profit number is maintained each month.
Do contribute to the financial statements: The bookkeeping section keeps current
records of the business's revenue and expenses in order to prepare the quarterly and
annual financial statements of the business. The division makes sure that accounting
guidelines are followed in financial reporting.
Provide customer service: It is a common objective for accounting representatives to
offer customer support and information whenever feasible because accounts
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receivables are frequently contacted in order to collect payments. Common
departmental objectives include responding to emails or questions within 24 hours,
paying invoices to the company within 10 business days of receipt, handling any
surcharges applied to clients who missed a payment limit, and providing details about
current invoices.
When consider about the nestle company they have more employees who are working in
their organization. It is important to identify the structure or the hierarchy of the
accounting department as it plays a vital role within the organization. The majority of
businesses have more than one employee in their accounting section, so they must
establish an organizational structure to improve management. The Chief Financial Officer
(CFO), Financial Controller, Managers, and Accountants make up the majority of this
group (Hopwood, 2013) . The following is the structure that can be identified in the nestle
company.
Control is held by the Chief Financial Officer (CFO). Of the division and works
under the direction of the company's CEO or creator. (CEO).
The Head Financial the officer is one who the reports financial Controller to and
within the department, the Financial Controller is responsible for much more
significant and essential tasks.
The management team for the finance controller usually consists of The Payroll
Manager, Accounts Receivable Manager, and Accounts Payable Manager is the
three managers in charge of the accounts.
Typically, there are a few accountants assigned to each section supervisor.
Apart from the controller in the organization can identify these sections too. They
are treasurer, head of internal audit, tax, investor relations and business unit
finance.
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Following graphical representation can be shown as the hierarchy of nestle company’s
accounting department.
Investor Business
Finance Internal Tax
Treasurer relations Unit
Controlle Audit
Finance
r
Accounting departments have hierarchies based on the job an accountant holds and the years
of experience. Most individuals with a year or less of professional expertise who have
recently graduated from accounting school start out as staff accountants at a company.
Depending on the sort of accounting they specialize in, staff accountants have specific duties
and responsibilities. An accountant on the management staff primarily aids in financial
planning, while an accountant on the tax staff focuses on the tax issues facing a business.
Staff accountants usually answer to a manager or senior-level accountant as their supervisor.
It is a requirement that the business has a minimum of two employees. Larger companies are
more likely to have more complex accounting divisions with many levels and rungs on the
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ladder. For a small business, there might be one accounting manager who supervises and
coordinates the efforts of a modest accounting team. The vice presidents of accounting and
the controller are typically the two people at the top of the organization. But not every
company has a boss or chief financial officer. In some organizations, a vice president might
manage some financial division activities while also managing other organizational divisions.
Amounts are entered twice, once as credit and once as debit, in the transaction records using
the double-entry technique. As an illustration, there is a receipt for a borrowing from a bank
for $100,000. This is marked as the sum due and recorded in the account as a credit. As a
result, there is equilibrium of credit and debit. When it comes to nestle company also they
basically issue their annual report which prepare according to the procedure of the financial
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accounting. They also practice the double entry method in their accounting activities (Libby
et al., 2002).
In here can identify two types of accounting which everyone should be concern about. The
first is called cash accounting, and it only records transactions after money is received. It's
unclear whether anything was earned or spent in that time frame. This is only relevant to
small businesses where no statements are required, only a small number of transactions need
to be recorded, there is little fixed capital, and there are not many employees.
Although the single-entry method is easy to maintain and transparent in terms of liquidity, it
is considered inaccurate and is not recognized by the Companies Act. (Dyckman & Smith,
1979).
The second strategy is called cumulative accounting, and it is based on the ideas of matching
income and revenue recognition. It keeps digital records of each exchange. While expenses
that happened but for which cash was not paid will go in the liabilities account, revenue that
was earned but not yet received will go there. Every company that conducts extensive
bookkeeping uses this method because it is the most precise and thorough.
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7.6. Financial accounting's significance
When consider about the financial accounting four main financial statements needs to be
consider through this sections readers will be able to have through idea about those
financial statements and their tasks and how the nestle company prepare their financial
statements and the standards that they practice when preparing financial statements The
main four financial statements that are included in financial accounting are the income
statement, balance sheet, cash flow statement, and changes in equity.. There is a universal
accepted structure and process to prepare those financial statements. And there are some
standards that need to be following up once a particular company prepare their financial
staemnts.in here can identify how nestle company use the standards in order to prepare
the financial statements.
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According to nestle company year ended 2021 their profit shown as 5,329,150. And in the
income statement it is shown Rs 99.19 as their earing per share. In this year they had Rs
45,420,119 revenue.
When consider about nestle company according to their financial statements following
figures can be taken out from their balance sheet. As mentioned earlier the balance sheet
contains assets, liabilities and equity. Once it comes to assets can identify both current
assets and non-current assets. When it comes to liabilities it also has current liabilities and
non-current liabilities. According to nestle group they have Rs 8,888,144 worth non-
current assets and Rs 25,115,747 worth current assets. It has Rs 7,360,600 and Rs
9,320,485 worth non-current liabilities and current liabilities respectively. They have Rs
8,434,653 worth equity base in their company in the year of 2021.
Cash flow statement: An sign of changes in assets, obligations, or equity can be found in
a cash flow statement, which is also used to monitor liquidity. This financial statement is
divided into three sections: operating operations, investments, and financial activities.
Cash flow of Operating Activities keeps track of all payments made for taxes, interest,
and employee salaries, as well as all related transactions. The records of transactions in
asset purchases or loan borrowing, as well as profits and losses incurred for investing
reasons, are included in the cash flow of investments. Cash flow's financial activities
include loan repayment, stock and equity repurchases, and dividend payments (Gilchrist
& Himmelberg, 1995).
According to the nestle company following details can be find out. Prior to changes in
working capital, they have operating profit of Rs. 7,120,080. Operating Activity Net Cash
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Flows total Rs 4,781,790 for them. Rs 6,975,584 worth in the summary of financial flows,
both cash and cash equivalents are represented.
Statements in changes in equity: This paper was created to make it easier for all
shareholders and investors to understand changes in stock and make decisions
accordingly. The statement includes notes for all net income, dividends, and changes in
owners and accounts, as well as the equity's beginning and ending values. take place
during that time. Also known as the "Statement of Retained Earnings," this document
(McConnell et al., 2005).
Following procedures are used by nestle company once they prepare the final accounts.
They follow up some accounting standards once they prepare their financial accounts.
Following are some of their practices.
Principal Activities and Nature of Operations: The Company's main business activities
consist of the manufacture, marketing, and sale of food and drink items as well as the
export and re-export of locally made products.
Statement of Compliance: Nestle Lanka PLC has prepared the financial statements in
compliance with the Sri Lanka Accounting Standards (LKASs and SLFRSs) given by the
Institute of Chartered Accountants of Sri Lanka, the needs of the Companies Act No. 7 of
2007 and provides suitable information as required by the Listing Rules of the Colombo
Stock Exchange (CSE). The accrual method of accounting was used to produce these
financial statements, with the exception of information on cash flows.
Basis of Measurement: With the exception of; there are no adjustments made to account
for inflationary factors which could affect the financial records because they are
consistently generated using historical cost basis.
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Less plan assets, the defined benefit obligation's responsibility, calculated at the
defined benefit obligation's present worth.
Equivalent to fair market value obligations for the share-based payment contracts
with cash payments.
Costs for property, plant, and equipment are documented less total depreciation and
impairment losses (Recognition and Measurement). The cost of an object is comprised of
costs directly associated with its purchase.
When there is a present obligation, liabilities and provisions are disclosed in the Statement of
Financial Position. legal or constructive commitment resulting from past events that is
expected to be settled by an outflow of resources that will result in economic benefits.
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Step 1: Identify Transactions: Throughout the accounting time, businesses will conduct a
large number of transactions. The company's books must correctly reflect each and every
one of them. There is a need for recordkeeping because all activities must be documented.
To keep track of sales transactions, many companies use point-of-sale systems that are
connected to their accounting software. There are expenses in addition to revenue, and these
can come in a variety of shapes and sizes.
Step 2: Record Transactions in a Journal: The following stage in the cycle is to record each
transaction in a notebook. Stages one and two can be combined with the aid of point-of-sale
technology, but businesses must also keep track of their expenditures. When transactions are
formally documented depends on whether accrual or cash accounting is used. For accrual
accounting to function, revenues and expenses must match, so both must be documented at
the time of sale. To meet with cash accounting principles, every time cash is received or
disbursed, a transaction must be recorded. To handle a fully developed balance sheet,
revenue statement, and cash flow statement, double-entry bookkeeping necessitates two
entries for each transaction.
Step 3: Posting: After being recorded as a diary entry, an occurrence must post to an
account a comprehensive ledger. The general ledger provides an account-by-account
breakdown of all bookkeeping operations. The ability to track money positions and statuses
by account is made feasible by this. One of the accounts in the general ledger that is
commonly referred to is the currency account, which displays the amount of cash on hand.
The ledger was once the de facto method for recording transactions in the business world,
but now that almost The ledger is no longer as important because everything is now
automatically recorded since all accounting is done online.
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Step 5: Worksheet: The fifth cycle step includes reviewing a worksheet and looking for
adjusting notes. A worksheet is made and used to ensure that the debits and payments are
equal. If there are any differences, changes must be made. When using accrual accounting,
matching income and expenditure may necessitate adjusting entries in addition to identifying
any errors.
Step 6: Adjusting Journal Entries: The sixth stage entails a change being made by a
bookkeeper. If adjustments are required, they are done and recorded as journal notes.
Step 7: Financial Statements: The business advances to the seventh stage, where it
generates its financial statements, after completing all adjusting entries. A revenue
statement, balance sheet, and financial flow statement are typically included for businesses.
Step 8: Closing the Books: In order to complete the accounting cycle, a business closes its
accounts in the eighth step, a business closes its accounts at the end of the day on the
designated closure date to finish the accounting cycle. In the concluding remarks, a
summary of the performance analysis for the full period is given. The bookkeeping cycle is
restarted following closing by the introduction of a fresh reporting cycle. Closing is typically
a wonderful time to turn in papers, set up the following reporting period, and review the
schedule of the day's activities.
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Analyze data: By calculating ratios and forecasting trends, the accounting data is
displayed in a meaningful manner. The analysis of this data is then used to guide
planning and decision-making. For instance, you could plan your purchases of various
goods according to the suppliers, the places, and the seasons.
Helps to take effective decisions: Management accounting can be used to
communicate a course of action across the organization. It begins by demonstrating
how various plan components are cohesive and organizationally viable.
Use of qualitative information: Using only numerical data to inform choices is not the
sole focus of management accounting. It takes into account intangible subjective
information that cannot be valued in monetary terms.
Helps to achieve goals: It aids in transforming organizational strategies and aims into
practical business objectives. By using standard pricing and budget control, two
crucial components of management accounting, these objectives can be accomplished.
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Marginal analysis: Profitability is compared to various expenses in this. The benefits
of greater production are emphasized primarily. Knowing the contribution margin on
the company's revenue mix is necessary to determine the break-even point, which
necessitates that information.
Constraint analysis: The limitations on a product's profits and cash movement are
tracked by managerial accounting. After analyzing the primary bottlenecks and the
problems they create, the impact on income, profit, and cash flow is calculated.
Capital budgeting: In order to decide what capital investments to make, this material
has been examined. Managerial accountants carry out this analysis and to assist
managers with capital planning choices like calculating payback period or accounting
rate of return, compute the net present value and internal rate of return.
In nestles company they calculated some ratios in order to get much more idea about the
company performances and those ratios will help out to take managerial decisions.
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Ratio Percentage
(2021)
Figure 2
Figure 3
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9. Auditing Function
When consider about the audit functions of nestle company following information can be
consider relating to that aspect. According to global auditing standards, an entity called the
internal audit activity assessment was established as a service to it. Examining, assessing,
and determining the effectiveness of internal management are a few of the responsibilities
associated with internal audits. Enhancing the entity's activities and services is the main goal
of internal audit Because of this, that group establishes strict rules that apply to more than
just money. The financial success of the company is continuously examined by internal
audit. A thorough examination of all facts of financial operations, accounting, and other
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services as part of an objective evaluation of the management of the economic entity. An
examination of the tasks associated with conformity evaluation, financial accounting records,
reports, assets, capital, and outcomes, and a paper certifying or attesting to those records. The
internal inquiry is impacted by the control structure of the organization. Contrast this with the
organization's internal management system. The two divisions are distinct from one another
and operate independently of one another. Conducting internal audits, planning duties or
obligations, and signing internal audit reports must be the responsibility of internal auditors.
Internal auditors are employed by the business as full-time, permanent workers who
immediately answer to management or the shareholders' general assembly.
Here are some audit function that nestle group has taken within year 2021At the 40th Annual
General Meeting, which was held on June 10, 2021, the owners of Nestlé Lanka PLC
reappointed As the Company's Auditors, Ernst & Young. They also gave the Directors the
freedom to choose their own salaries. For the year ending December 31, 2021, independent
accountants performed the annual audit in order to provide an opinion regarding the financial
statements. The CEO and any previous members of the Executive Board are not included in
the Audit Committee, which is made up of at least two other non-executive members of the
Board and a Chair who is independent and non-executive. Each participant must be
autonomous. The other members should be conversant with accounting and auditing issues,
and at least one of them should have current and relevant financial knowledge. Here are the
primary responsibilities of the Nestle Company's audit group.
To evaluate management's decisions and actions with regard to the Company's year-
end financial statements and, if required, contest them..
In order to advise the Board of Directors on the choice of external auditors that will be
made by the shareholders.
To interact about the audit processes, the planned audit's proposed scope, and the
findings of the internal and external audit.
To frequently update itself on significant audit findings and their development.
To keep an eye on the internal and external auditing's standard.
To report the results of the ratification of the Financial Statements to the Board of
Directors.
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To examine the Group's annual risk assessment as well as reports on internal controls,
compliance, fraud, and enterprise risk management.
Internal controls, which ensure the accuracy of financial reporting and legal compliance, are
the accounting and auditing procedures used in a company's finance section. Organizations
can adhere to legal requirements and avoid fraud with the help of internal safeguards. By
ensuring that budgets are adhered to, capital shortages are acknowledged, policies are
followed, and accurate reports are produced for leadership, they can also help to increase
operational efficiency. An organization's internal controls, including its accounting and
corporate governance structures, are evaluated by internal audits. In addition to ensuring
timely and accurate financial reporting and data gathering, these internal controls can also
guarantee that laws and regulations are followed. They maintain operational effectiveness by
spotting issues and.
Along with the requirements set forth by law for an external assessment, Nestlé Lanka PLC
follows industry best practices developed by the Nestlé Group. To ensure such compliance,
the Company conducts routine reviews and is additionally watched by recurring multi-tiered
audits conducted by the Group's International and Regional Auditors, as considered
necessary. The internal auditors of the business regularly carry out internal audits and are
directly responsible to the Director of Finance and Control as well as the Managing Director
and the Audit Committee of the company. After reviewing the existing protocols and
systems, the Audit Committee is confident that the Company's internal controls provide a
reasonable level of assurance regarding the financial reporting and that the Colombo Stock
Exchange's listing rules have been adhered to. The Board of Directors has put in place a
crystal-clear and efficient internal management system. It also consists of the internal audits,
checks, and controls, as well as the financial and other safeguards required managing the
25
business successfully and safeguarding its assets in a safe, effective, precise, and reliable
way.
Here are some challenges that nestle company’s accounting department faced during the
year 2021. Those challenges can be pointed out as follows. 2021 presented new challenges
for Nestle Company to overcome.
Although the epidemic presented many difficulties, they persisted in their mission to provide
their customers with high-quality, secure, locally produced goods and services. They credit
their front lines with their outstanding performance because of their dedication and tenacity
during the third COVID wave. The commitment of their staff, vendors, wholesalers, and
other ecosystem partners has been crucial to maintaining their operations throughout their
value chain. Following the pandemic and its challenges, they persevered in inspiring their
teams and stakeholders along our value chain to keep their commitments. The third wave
had a significant negative effect on the local market because of a protracted lockdown and
increased strain on our front line personnel, so it was essential to adapt and provide goods
and services with agility in order to meet people's needs. We're pleased to report that
throughout it all, we put a high priority on the health and safety of both our employees and
our business partners, and we took many measures to ensure their protection.
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12. Conclusion
When consider about the conclusion this report is discussed about the role of accounting
department of a selected company. For this report nestle company was the selected
organization. As the first step the readers can get a clear idea about the organizational
background and its history, the products that they produced and the brands of that particular
company. Then this report provide the basic idea of the primary objectives of the accounting
department and the importance of the department towards the organization once they going
to achieve their goals and objectives. Then this report discuss of the hierarchy of the
accounting department developed. That will provide how the organizational structure
developed. Most importantly this report provides the idea about financial accounting aspect
of the organization. Under that topic readers will be able to have an idea about what is
financial accounting, importance, process and procedures comes under the financial
accounting and how the nestle company adopt their financial accounting aspect to their
company and so on. Furthermore the readers will be able to have a thorough idea about the
management aspect of the company and the importance of it and the process that followed
up under the management accounting aspect. Then this report provides basic ideas regarding
auditing function and the practices carried out by nestle company relating to the auditing
function. Then the internal controls of the company and the importance of the internal
controls towards a particular company will be discussed through this report. Finally there
will be information relating to the challenges that faced by the accounting department of the
nestle company itself.
27
13. References
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Review of Financial Economics, 3, 289–307. https://doi.org/10.1146/annurev-financial-
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Alkaswna, R. O., Al-Oqool, M. A., & Bashayreh, M. M. (2014). The Importance of the
Accounting Information and the Role of the Scientific Accounting Research in
Developing the Economic Development Service in the Developing Countries (Case
Study Jordan). Research in Applied Economics, 6(1), 240.
https://doi.org/10.5296/rae.v6i1.4699
Burns, J., & Vaivio, J. (2001). Management accounting change. Management Accounting
Research, 12(4), 389–402. https://doi.org/10.1006/mare.2001.0178
Dyckman, T. R., & Smith, A. J. (1979). A Study of Information The relationship among an
event ’ s occurrence , its information content , and the adjustment of firms ’ fair market
value is a fundamental issue in accounting research . Information content studies which
analyze this re- lationship. Journal of Accounting and Economics, 1, 45–75.
Gilchrist, S., & Himmelberg, C. P. (1995). Evidence on the role of cash flow for investment.
Journal of Monetary Economics, 36(3), 541–572. https://doi.org/10.1016/0304-
3932(95)01223-0
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Hung, M. (2000). Accounting standards and value relevance of financial statements: An
international analysis. In Journal of Accounting and Economics (Vol. 30, Issue 3, pp.
401–420). https://doi.org/10.1016/S0165-4101(01)00011-8
Libby, R., Bloomfield, R., & Nelson, M. W. (2002). Experimental research in financial
accounting. Accounting, Organizations and Society, 27(8), 775–810.
https://doi.org/10.1016/S0361-3682(01)00011-3
McConnell, J. J., Servaes, H., & Lins, K. V. (2005). Changes in Equity Ownership and
Changes in the Market Value of the Firm. SSRN Electronic Journal.
https://doi.org/10.2139/ssrn.470927
Venter, E. R., Gordon, E. A., & Street, D. L. (2018). The role of accounting and the
accountancy profession in economic development: A research agenda. Journal of
International Financial Management and Accounting, 29(2), 195–218.
https://doi.org/10.1111/jifm.12080
Whittington, R., & Pany, K. (2014). Texas Woman ’ s University School of Management
BUS 5423 ‐ 55 ( 68696 ) – Auditing II Class Syllabus Spring 2011. Auditing-A Journal
of Practice & Theory, 55(68696).
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14. Appendixes
14.1. Appendix 01
14.2. Appendix 02
30