The document outlines the author's role as a production accountant at Gem Star Production Inc. and presents a report on the first month using activity-based accounting, detailing the company's financial position along with internal control recommendations. Key internal controls include auditing, communication standards, risk assessments, evaluation processes, and monitoring activities to safeguard company assets and ensure compliance. The report emphasizes the importance of a structured environment and encourages employee feedback while highlighting the consequences of non-compliance with new regulations.

2. Thank you for my promotion at Gem Star Production Inc. as your
Production Accountant! I have been assigned to establish a system of
internal controls that will help safeguard the company. This analysis report
will be demonstrating the first month’s performance with my newly applied
services of ‘Activity Based Accounting’ to the company, including financial
statements, balance sheets, recommendations and the definitions of five
internal controls for management review.

3. •
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Balance Sheet

4. • Cash account has a balance of $49,280.00.
• Supplies Inventory account has a balance of
$1,333.00 after expensing $667.00 of the
purchase due to usage.
• ‘Vehicles’ account has a balance of
$13,953.00 as a result of purchasing a
vehicle for $14,250.00.
➡Depreciating value at the rate of $297.00
per month.
• ‘Deposit at Vendor’ account has a balance
of $500.00.
Balance Sheet: 2 Continued
Account Activity: Assets

5. • Loan Payable has a balance of
$49,280.00.
➡Interest Payable balance of
$233.00.
Balance Sheet: 3 Continued
Account Activity: Liabilities
Account Activity: Equity
• Common Stock has a balance of
$20,000.00.
➡Retained Earnings has a balance of
$4,833.00.

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9. •
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• indicates
activities.
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(investopedia , 2023)

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➡
➡ Depreciating value at the rate of
$297.00 per month.
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11. • Internal control is a method or process for everyone in the workforce to follow but mostly
directed for the governing board, administration, faculty and staff of the policies and
procedures management uses to achieve a successful work environment and proficiency.
• The primary purpose of internal controls are to safeguard a company and broaden its
ambitions.
• Internal controls aim to reduce risks and protect assets by ensuring accuracy in keeping
records, promote operational efficiency, and encourage fairness regarding policies,
regulations, and laws.
(Michigan Tech, n.d.).

12. 1. Internal and Environmental auditing
2. Communication and approval authority requirements
3. Risk Assessments
4. Evaluations and Insurances
5.Monitor internal controls and activity

13. 1. Internal and Environmental Auditing: Examine the work atmosphere and
lead by example to make it a controlled environment:
• Share a positive attitude and uphold integrity and ethical values to safeguard a competent work environment.
• Investigating discrepancies
• Uphold fairness across all board and staff members providing a safe, inclusive, diverse and dignified work
environment.
• Establish a work structures, schedules, superiors, responsibilities, and consequences.
• Implement employee appreciation

14. 2. Communication and Approval Authority
Requirements:
• Use quality information or well-structured ideas before approval and application.
• Communicate effectively without bias and use mutual respectful body language
and mannerisms.
• Set clear, expectations, intentions and direction in your conferences.

15. 3. Risk Assessments:
• Identifying vulnerable areas that pose a threat or risk of inaccuracies.
• Analyze the severity of these risks and check for any fraud accounts or
transactions.
• Indicate appropriate, obtainable goals or changes that could positively or
negatively affect the company.

16. 4. Evaluations and Insurances:
• Perform periodic evaluations of internal controls and welcoming a company feedback platform to
review.
• Validate outlooks regarding discrepancies during investigations.
• Offer timely solutions regarding discrepancies.
• Ensuring the business and establishment is legally registered, insured and operating up to code.
• Monitor and review physical audits of assets and activities.

17. 5.Monitor internal controls and activity:
• Develop controlled activities that ensure less risks within the
environment.
• Develop or implement innovations or technology tools, etc. to help
control activities.
• Implement control activities through procedures and policies.

18. • To examine the environment of the workforce and determine if the internal controls are being
exercised, a written document of the new rules and regulations will be provided.
It is required of employee’s signatures in agreeance to abide by the new controlled activity-
based system, safety regulations, anti-discrimination, and zero-retaliation policy.
Failure to agree or abide by new legal regulations will result in an immediate evaluation with the
company’s human resource department for further investigation of the individual’s employment
status and risks.
• Feedback and concerns will now be considered from an anonymous viewpoint through the
website, employee app or the office suggestion box unless summitted as a personal complaint.
This ensures an unbiased consideration towards discrepancies.
• To ensure timely solutions to potential concerns or issues that arise, there will be a follow up
courtesy call to clients or potential prospects, including asking for customer reviews and
feedback on satisfactory.

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20. https://www.washingtonpost.com/lifestyle/2023/07/15/actors-strike-what-are-residuals/
https://www.freepik.com/
https://hello.fullsail.edu/
https://www.hudoig.gov/sites/default/files/Internal%20Controls%20Integrity%20Bulletin%20CPD.pdf
https://www.investopedia.com/
https://www.investopedia.com/terms/a/abb.asp#:~:text=Activity%2Dbased%20budgeting%20(ABB)%20is%20a%20method%20of%20budgeting,for%20
inflation%20or%20business%20development
https://www.mtu.edu/internal-
audit/control/what-is/#:~:text=Internal%20controls%20function%20to%20minimize,rules%2C%20regulations%2C%20and%20laws