Reference no: EM132715004

Question: Okawa Limited is a leading automotive repair centre in Victoria. The Okawa manager is responsible for raising the initial repair orders which are then sent to the administration area for invoicing.

The administration consists of a bookkeeper and a finance manager. The bookkeeper undertakes all invoicing and banking, along with follow-up of any outstanding accounts. A monthly report of amounts invoiced, banked and outstanding debtors is given to the finance manager.

The Okawa engages three full-time staff and up to 5 casuals at any time. Overtime is often worked on weekends by all staff. Inventory is stored in the Okawa warehouse which is accessible by all staff on an 'as needs' basis, based on a work order raised by the Okawa manager.

Your initial review of the business has highlighted the following risks:

(i) Non-collectability of debts;

(ii) Overpayment of overtime to employees;

(iii) Inventory being stolen; and

(iv) Payments being made to suppliers prior to receipts of goods.

Required: For each of the risk identified above in i-iv, determine a practical preventative internal control procedure that would assist in mitigating the risks identified above.