Reference no: EM132561332

Question - Recently, while having dinner with your family at Penang Kayu Nasi Kandar to celebrate the completion of your Auditing Test 1, you observed a practice that is somewhat unusual. As you settled down in the restaurant, a waiter quickly came over to take your order and then brought you the food that you requested. He then wrote down all the food that you and your family members had ordered on a bill and entered the number of persons in your family at the top right-hand corner of the bill. He handed the bill over to you and asked you to pay when you have finished eating.

Towards the end of the meal, you decided to have some additional dishes, so you called one of the waiters and the waiter went through the same procedures again. After bringing you the additional dishes requested, the waiter issued another bill for the additional dishes and stapled the bill to the first bill issued earlier on and returned both bills to you.

When you were about to leave the restaurant, you handed the bills over to the cashier stationed near the entrance of the restaurant, who totaled the bills, took your money, and put the bills in the drawer at the counter.

Required -

a) Based on the above, identify and explain all the internal control procedures instituted by Penang Kayu Nasi Kandar to control its daily operations. Are there any weaknesses in the restaurant's existing control procedures that you have identified? If there are, state why you feel that it is a weakness and suggest what the restaurant's management can do to correct the weakness (without investing in any IT related controls).

b) Anshary is one of the managers at Penang Kayu Nasi Kandar. Explain what Anshary can do to evaluate the effectiveness of the internal controls at the restaurant?