1.

1 Scope and Purpose

In this modern day setting, the use of high end technology is a great advantage
for everyone. So as with the businesses that are continuing to sprout, grow, develop,
and eventually leads in the race to excellence, the advantages that technology is giving
them is quite beyond the threshold to a more developed entity. By this, the use of
different applications, especially software throughout the corporate world, had been a
trend since the introduction of such software.
The field of accounting is not an exception to the dominion of technological
advances. Modern day accountants find these developed technologies, especially
software, to be the answer to the ever demanding business world. The development of
accounting software became the starting point for the advancement, in terms of
technological aspect, for modern day accountants in their pursuit for excellence and
become the premier in the business endeavour. One of the advantages of using
Accounting Software is that it has a very high level of integration among its individual
applications which guarantee consistency of data throughout the system and the
company itself. Given that nothing becomes perfect as expected, this also has its own
downside. One of its disadvantages is the misapplication or wrong choice of software to
be used. There are also software that are not suitable in a particular businesses. With
regards to this problem, the primary goal of this project is to help the client in solving
such issues, as well as introducing the Accounting Software that is suitable to their
company.
The proponent henceforth will focus on the Disbursement Cycle of the chosen
client, Precision Machinist Corporation (PREMACOR), which had given their consent to
be the subject of this project. The company is engaged in providing quality metal
products and components. They have been continually leading the industry they
belonged for the past years, especially in the exportation aspects. By this, the
proponents strive to achieve the goals in making this particular endeavour to become a
productive one.
The proponents will conduct an extensive research to gain knowledge about the
company, in such a way that the proponents could help the client in improving their
system (Disbursement process). And this would be possible with the cooperation of the
aforementioned client, as what had been stated in the client agreement form.

1.2 Planned Use of Company Sources

Mission Statement
We, Precision Machinist Corporation (PREMACOR), an ISO 9001:2008 certified
company providing quality metal products and components since 1980. We can do runs
from prototype to production. We put high premium on skills development with
equipment that requires care and expertise in handling. We are committed to provide
the best quality products and services that meet customer satisfaction and continuously
improve the system to exceed customer expectation toward quality excellence. With
more than 30 years of experience and an impressive track record, PREMACOR
continues to remain Cebus leader in metalworking industry.
Per agreement between the proponents and the client company, Precision
Machinist Corporation (PREMACOR), the proponents are given the opportunity to
observe and to know the disbursement process of the company in collaboration with
Mrs. Susana V. Acoymo, Accounting Manager of the aforementioned company.
To be able to gather important and relevant information aside from interviews and
giving of questionnaires to the client, the proponents would like to observe the
preparation of the payrolls, loan repayments, and other internal disbursements with the
permit from the company. Furthermore, researches using the internet, articles and
journals about the company, and companys website would be of great help.

Accounting System and Financial Capability Questionnaire

(Precision Machinist Corporation)
The purpose of this questionnaire is to provide the proponents with information
needed to assess the adequacy of the financial and accounting system specifically the
disbursement process of the aforementioned company.
GENERAL: Internal Controls (Cecilia R. Morales-VP Finance)
1. Are the duties for key employees of the organization
defined?
2. Is there an organization chart which sets forth the
actual lines of responsibility?
3. Are written procedures maintained covering the
recording of transactions?
a.
Covering an accounting manual?
b.
Covering a chart of accounts?
4. Do the procedures, chart of accounts, etc., provide
for identifying receipts and expenditures of program
funds separately for each transaction?
5. Does the accounting system provide for
accumulating, recording expenditures and cost

YES NO
N/A
category shown in
the approved
budget?
6. Does the
organization
maintain a policy
manual covering
the following:
a. Approval
authority for
financial
transactions?

b. Guidelines for controlling expenditures, such as

purchasing requirements and travel
authorizations?
7. Are there procedures governing the maintenance of
accounting records?
a.
Are subsidiary records for accounts payable,
loans payable, etc., balanced with control
accounts on a monthly basis?
b.
Are journal entries approved, explained and
supported?
c.
Do accrual accounts provide adequate
control over income and expense?
d.
Are accounting records and valuables
secured in limited access areas?
8. Are duties separated so that no one individual has
complete authority over an entire financial
transaction?
9. Does the organization use an operating budget to
control funds by activity?

10. Are there controls

to prevent
expenditure of
funds in excess of
approved,
budgeted
amounts?
11. Has any aspect of
the organizations
activities been
audited within the
past 2 years by
another
governmental
agency or
independent
public
accountant?
PURCHASES: (Centinia
Dulce Gaihe
Logistics Manager)
1. Is the purchasing
function separate
from accounting
and receiving?
2. Does the
organization
obtain competitive
bids for items,
such as rental or
service agreements, over
specified
amounts?
4

3. Is the purchasing agent required to obtain additional

approval on purchase orders above a stated
amount?
4. Are there procedures to obtain the best possible
price for items not subject to competitive bidding
requirements, such as approved vendor lists and
supply item catalogs?
5. Are purchase orders required for purchasing all
equipment and services?
6. Are purchase orders controlled and accounted for
by prenumbering and keeping a logbook?
7. Is the purchasing department required to maintain
control over items or dollar amounts requiring the
company to give advance approval?
DISBURSEMENTS: (Flora Tapinit A/P Officer)
1.
2.
3.
4.
5.
6.
7.

Are checks controlled and accounted for with

safeguards over unused, returned, and voided
checks?
Is the drawing of checks to cash or bearer
prohibited?
Do supporting documents, such as invoices,
purchase orders, and receiving reports,
accompany checks for the check signers review?
Are vouchers and supporting documents
appropriately cancelled (stamped or perforated) to
prevent duplicate payments?
If check signing plates are used, are they
adequately controlled?
Are two signatures required on all checks or on
checks over stated amounts?
Are check signers responsible officials or
employees of the organization?

8.

9.

Are bank
accounts
reconciled
monthly and are
differences
resolved?
Concerning
petty cash
disbursements:
a. Is petty
cash
reimbursed
by check
and are
disburseme
nts
5

b.
c.
d.

reviewed at that time?

Is there a maximum amount, reasonable in
the circumstances, for payments made in
cash?
Are petty cash vouchers written in ink to
prevent alteration?
Are petty cash vouchers canceled upon
reimbursement of the fund to prevent their
reuse?

PAYROLL: (Anie Marie Rivera Payroll in Charge)

1.
2.
3.
4.
5.
6.

Are payroll and personnel policies governing

compensation in accordance with rules and
regulations?
Are there procedures to ensure that employees
are paid in accordance with approved wage and
salary rates?
Is the distribution of payroll charges checked by a
second person and are aggregate amounts
compared to the approved budget?
Are wages paid at or above the minimum wage?
Are procedures adequate for controlling: (a)
overtime wages, (b) overtime work authorization,
and (c) supervisory approval of overtime?
Are payroll checks distributed by persons not
responsible for preparing the checks?

INDIRECT COSTS: (Susana Acoymo-Accounting

Manager)
1.
2.
3.
4.

Does the organization have an indirect cost

allocation plan or a negotiated indirect cost rate?
Is the plan prepared in accordance with the
provisions of rules and regulations?
Has audit cognizance for the plan been
established?
Does the organization have procedures which
provides assurance that consistent treatment is
applied in the distribution of charges as direct or
indirect costs to all transactions?