Sheraton Ltd operates a chain of supermarkets across the Islands. Each supermarket has a bakery and a restaurant. However, due to the COVID-19 protocol, only take-out service is being offered. Most of the customers are within walking distance to the supermarket, however, due to the excellent service and reasonable prices. a few customers travel from communities that are out of the area to shop.

Management has reviewed the inventory reports and observed there are consistent discrepancies with the cash counts and inventory. They suspect that some employees have been stealing goods from the supermarket. They are keen to prevent this from reoccurring and considering establishing an Internal Audit Department to undertake a fraud investigation.

The Directors would like the Internal Audit Department to have as broad a role as possible, as this will make the decision to establish an Internal Audit Department more cost effective, rather than outsourcing same.

REQUIRED:

Prepare a report to the Directors, advising how the Internal Audit Department can add value to the operations of the entity.