Peking Palace - Ng 1 To: Mr. Chen From: Fat-Sang Ng (Edwin)...

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Ng 1 To: Mr. Chen From: Fat-Sang Ng (Edwin) Date: Feb 22, 2011 Subject: Peking Palace Audit Recommendations Dear Mr. Chen, Purpose Statement The main purpose of this memo is to audit Peking Palace and recommend internal control for Peking Palace. This paper is separated into “purchases and payments” and “payroll” business process sections. Purchases and payments Two customers who had an account at the Peking Palace were charged when the credit limit was reached. This involves credit risk to Peking Palace because customers may not have enough cash to pay back the restaurant. This may lead to liquidity risk that Peking Palace may not have enough cash flow to pay back suppliers if Peking Palace is unable to collect cash from two customers. The handwritten receipt didn't have an original copy was hard to trace if the food service was overcharge or undercharge. Employee may over order the food but didn't record the extra amount of sales. Peking Palace may instead starting a debt card with discount or gift card system in the restaurant. The new system will be computer generated with back up copies for manager to track food sales or cash flow of the company. The new system may cause these two customers uncomfortable to pay ahead. But encouraging frequent customers with discount and tracking the food service they order will benefit Peking Palace's inventory because those data collected from the customers can be use to manage how much or what kind of food to order. Giving customers the receipt will utilize customers
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This document was uploaded on 03/19/2011.

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Peking Palace - Ng 1 To: Mr. Chen From: Fat-Sang Ng (Edwin)...

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