Mission and Vision of BDO Australia - Case Study Example

Accounting System Students Name Institution Supervisor Date 1.0 Introduction The aim of every business is to minimize the risks that may prevent them from achieving their goals. Some of these risks come about due to poor record keeping. The failure to effectively monitor the activities of the organization and the parties they engage in transactions with can put the organization in a very precarious position. One of the methods that organizations use to monitor their activities is the Database Management System (DBMS). A Database Management System (DBMS) is a computer program that allows a computer to perform the functions of storing, retrieving, adding, deleting and modifying data. Relational Database Management System on the other hand is a Database Management System that implements the relational model of tables and relationships. Examples of Database Management Systems include; Microsoft Access, MySQL, Oracle, Microsoft SQL Server and FileMaker Pro. Among these, Microsoft Access is the most common and easiest to use. 2.0 Objectives The aim of this report is to analyze the mission and vision of BDO Australia, the core business and the inherent risks that the company faces when striving to achieve the vision. This report also analyzes the revenue cycle of the business. To achieve this, the report will use Microsoft Access to create relational databases to bring out the relationship between the various components of the business. 3.0 The Organization 3.1 Background BDO was founded in 1963 with five original member firms in the United States and Canada. These firms formed the Seidman International Group. TheBritish, Germany and Dutch member firms adopted a common name, in 1973, whose acronym has endured for the entire global network. Establishment of the firm in Australia can be traced back in 1975. The firm has continued growing and is today one of Australia’s largest association of independently owned accounting firms, with offices in Adelaide, Brisbane, cairns, Darwin, Hobart, Melbourne, Perth and Sidney. Since its establishment in 1975, the company has witnessed tremendous growth with most achieved in the form of mergers. The company provides services to a diverse range of clients, from large corporate organizations to private businesses, entrepreneurs and individuals across a broad array of the industrial sectors. 4.0 Key Goals BDO Australia provide a wide range of service lines and specializations to ensure that their clients are provided with service teams that are able to draw upon knowledge, experience and expertise in their specific areas of specialization. In the area of audit, BDO has a team of audit specialists and technical experts who provide independent credibility for financial statements of firms, professional advice to management, and solutions to improve systems and performance. In the field of tax , BDO has ateam of corporate tax specialists, indirect tax advisors and lawyers who can help an organization to navigate the complex tax landscape by providing tailor made advice on corporate structures, transfer pricing, tax compliance, ATO dispute management, expatriate services, mergers and acquisitions, payroll tax, grants etc. BDO also provides a comprehensive suite of forensic services to assist the clients meet their ever increasing demands on time and resources. The forensic services cover litigation and dispute resolution, fraud and corruption risk management, and computer forensics and data recovery. 5.0 The Risks Associated with the Above Goals The changes that may be effected by the government of the day in terms of legislation and directives can affect the tax department of BDO Australia. Amendment of the existing tax laws can positively or negatively affect the activities of the company. The tax department can also be affected by the unpredictable financial crisis that may befall the country, region or the world. BDO Australia should thus put in place measures to mitigate such risks whenever they occur. The audit department is faced with an array of risks which include inherent risk, control risk, detection risk and audit risk. Inherent risk: this is the risk that occurs when an account is materially misstated due to fraud or error. The events within and outside the company both affect the inherent risks. Tough economy, availability of financing and anew competitor all increase inherent risk. Control risk: this risk occurs due to the ineffective nature of a company’s control system. The possibility that a misstatement may go undetected increases as the internal control measures put up by the company decreases. Detection risk: this is the risk that the audit procedure in place will not detect the material misstatement in the financial statements. This is the responsibility of the auditor. Audit procedures can reduce detection risks. Audit risk: this is the possibility that an auditor will issue an audit opinion free from errors, which is hardly the case. The auditor needs to keep material misstatements at an acceptable level. In the advisory department of BDO Australia, there is high probability that the company in question may provide misleading information which then translates to misleading conclusions. The client company may do this to save face and make their company appear more appealing than it really is. Furthermore, the practice of collusion can easily be witnessed in the audit, taxation, and advisory, departments. This is a risk that can lead the company to lose a lot of money. Employees may receipt of services or products at different price. Unauthorized insurance amount Amounts owned that forgiveness Illegal extension of due dates 6.0 Business Cycles The revenue cycle is a set of business activities that keep on recurring. Business cycle is related to information processing operations linked with offering the clients with the services, the customer then makes payment which is then recorded on the company’s financial records. The production cycle refers to the set of activities that the company engages in, and which keep on recurring. The activities are related and are the components of cash generations in the company. These are the daily practices that BDO uses to achieve their goals. 6.1 Level 0 DFD 7.0 Revenue Cycle 7.1 Database and File Structure Table Name Primary Key Foreign Key Other Attributes clients Client number Auditor number Tax accountant Number Cashier number Counsel number Invoice number Client name Client company name Company address City Code Phone Email Audit Auditor number Client number Auditor name Gender Birthday Commencement date Phone Home address Nationality department Tax Tax account number client number Tax accountant number Gender Birthday Commencement date Phone Home address Nationality department Advisory Counselor number Client number Counsellor name Gender Birthday Commencement date Phone Home address Nationality department Finance Cashier number Client number Invoice number Cashier name Gender Birthday Commencement date Phone Home address Nationality department Invoice Invoice number Client number Invoice name Invoice date Total price Client company name 8.0 Screens and Reports See Appendix 1-3 9.0 Controls to Mitigate the Inherent Risks 9.1 Risk Analysis ( Legend: E-Extreme Risk, H-High risk, M-Moderate, L-Low risk) Rating Consequence 1(Insignificant) 2(Minor) 3(Moderate) 4(Major) 5(Catastrophic) 5（Almost certain) L L H E E 4 (Likely) M M H H E 3 (Possible) M M H H H 2 (Unlikely) L L M H H 1 (Rare) L L M M H Likelihood Consequences Rating Descriptor Description Rating Descriptor Description 5 Almost Certain Accounting industry satisfied all accounting services that clients required 5 Catastrophic Clients lost profit and future benefit, bad effect to the company in the future. 4 Likely Accounting Industry satisfied most of conditions that clients required 4 Major Clients lost profit, and bad effect in the current. 3 Possible Accounting industry satisfied half accounting services that clients required 3 Moderate Clients lost profit, but there is no future or current effect. 2 Unlikely Accounting industry satisfied less than half accounting services that clients required 2 Minor Clients lost a little profit, and there is not current or future effect. 1 Rare Accounting industry satisfied nothing that clients required 1 Insignificant There is a little effect in the current of the company, but will not affect the company’s operating. 9.2 Risk and control analysis No. Academic Risk Identification Analysis Academic Risk Treatment 1 Risk no. What can happen L C R Key controls currently in place Clients risks 2 1.1 Tax legislation could change 1 1 L Check tax legislation before provide service to clients. May affect client’s current and future profit. 3 1.2 Advisor provide wrong information 1 1 L Make sure the accuracy of information before provide to clients. Unwilling profit loss 4 1.3 Being audited financial statements were prepared in a material misstatement; risk of misstatements in the absence of internal controls. 2 2 M Make sure the accuracy of information from clients. Unwilling profit loss; effect current company’ position. 10.0 Conclusion Database Management Systems are an easy and convenient way to manage the information of large companies where the manual data storage methods are inapplicable. A competent database manager should be hired if the organization is to get the maximum benefit of the system. The system safeguards against data corruption as well as data redundancy. A suitable database management system should be chosen according to the size of the organization and the needs of the management. Business cycle is one important tool that management of a large organization like BDO Australia can employ for precise short term and long term planning. Since the state of the economy affects the business, having up to date information of the state of the economy will prove to be of great significance to the management of the company. Overall BDO Australia needs to put in place a team of competent individuals that can help in risk assessment and who are able to recommend mitigation measures to safeguard against any inherent risks that the company may face. 11.0 Index of Appendices Appendix 1: The Relationships Window Appendix 2: Relationships Appendix 3: Reports 12.0 References 1. RISK MANAGEMENT. (2011). Five steps to risk assessment. [Online] Available at: http://www.hse.gov.uk/risk/fivesteps.htm. [Accessed on: 27th May 2014] 2. JOHN, F. (2014). Risk in Accounting & Auditing Firms. [Online] available at: http://smallbusiness.chron.com/risks-accounting-auditing-firms-67385.html. [Accessed on: 27th May 2014] 3. PEARSON. (2011). Accounting Information Systems. [Online] available at: http://wps.pearsoned.co.uk/ema_ge_romney_ais_12/194/49668/12715217.cw/index.html. [Accessed on: 27th May 2014] Read More