Analysis Of The Accounting System At Cookridge Carpets Ltd

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Likewise, potential frauds were identified and recommendation for improvement has been made.

To estimate costs and benefits of the recommended solution, the writer has carried out cost-benefit analysis.

Organisation Background
Cookridge Carpets LTD is a limited company set up by 2 brothers, John and Peter Cookridge, in 2007 and has been trading for 3 years. The company is a large carpet, soft furnishings and bed dealership in Southampton and is the main dealer for memo@memory foam beds and matresses in the area.
To set up Cookridge Carpets Ltd, John and Peter, invested £80,000 plus extra money inherited from their uncle and managed to raise a loan of £100,000 from the bank. John and Peter purchased a large plot of land on which they developed an aircraft hangar sized building to use as the carpet and bed showroom. They started out selling carpets and then expanded into beds and soft furnishings. In February 2010, Cookridge Carpets Ltd was asked by memo beds to become the main dealership for Southampton. The brothers have been very successful in direct sales and have recently started selling beds
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(See appendix for an organization structure chart)
Cookridge Carpets Ltd is organized into departments – including an accounts department. The functions of accounts are to communicate with internal and external contacts to improve the running of the business. (See appendix for a structure chart on internal and external contacts.)
The three main departments of Cookridge Carpets Ltd are: Accounts, Sales and marketing, and research and buying.
The organizational chart allows employees within each area to see which department they belong to and what they need to do. The organizational structure of the business is essentially flat, as there are few layers of management that can respond quickly to challenges from the external environment but can lead to lack of co-ordination between functions.
The accounting function within Cookridge Carpets Ltd is a very small department as seen in the organizational chart. Its main tasks consist of preparing daily and monthly accounting tasks, managing the purchase and sales ledger, paying suppliers and producing month end and year end accounts. As Cookridge Carpets is a small company the accounts department is also responsible for payroll, human resources and many other

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