66.2 1o marker work in progress and provision for warranty claims

Question 1

References were not obtained for new employees recruited for the teams responsible for the
installation of electrical systems and the accounts department.

Answer 1

No employee references

Consequences
Employees may be hired but lack appropriate skills or qualifications for the role. This could
lead to:
* sub-standard work on electrical systems
* WIP that may not be recoverable; and
* an adverse impact on the reputation of Puskas.
In respect of finance employees, the accounting records may be unreliable.
This may result in additional costs to rectify the work which would have an adverse impact on
profits and cash flow.
Employees who lack integrity or have criminal backgrounds may be hired leading to the theft
of assets.
Employees may have falsified information about past roles or their identity. For example, the
company may be breaking the law by hiring employees that do not have the right to work in
the UK and this could leave the company legally exposed and result in fines.

Recommendations
* All offers of employment should be made subject to satisfactory references and formal
approval by management.
* At least two references should be obtained with at least one from a previous employer.
* All formal qualifications claimed by potential employees should be verified.

Question 2

Puskas does not routinely update its anti-malware software on its contract costing, purchases and
payroll systems.

Answer 2

No routine update of anti-malware software

Consequences
Systems are vulnerable to:
* hacking
* malicious programmes
* loss or theft of data leading to business interruption.
Damages may become payable and there could be an adverse impact on the reputation of
Puskas.
Puskas could be in breach of data protection regulations leading to fines.
This may result in in additional costs which would have an adverse impact on profits and cash
flow.

Recommendations
* Systems should be updated regularly for the latest anti-malware software
* Responsibility for updates should be allocated to a designated person

Cover should be in place for holidays and absences
* The designated person should report compliance to senior management

Question 3

general recoomendations

Answer 3

policies and procedures for employee references and updating anti malware software.

policies and procedures should be communicated by training

monitor adherence to policies and procedures

disciplinary procedures for those who to fail to comply