FIRST-GATE Company Limited is a business that will operate a debt recovery/collection agency. The idea to set up this company is as a result of perusing several financial reports and statements published in the dailies and journals by companies and other Small and Medium Enterprises and realizing the outrageously huge figures presented in such reports as Bad Debts and Provision for Bad Debt.
Any entity of whichever form or size should put in place its own system of controls in order to achieve its objectives (Kaplan, 2008). A system of effective internal controls is a critical component of company management and a foundation for the safe and sound operation of organisations. However, ineffective internal controls result in ineffective programmes and eventually leading to losses (Campbell, 2008).
That is why the Retired Executive Vice President of American Savings Bank, Mary Locatelli in September, 2003, made it known that, the recent incidence of corporate failures and accounting frauds are mostly preceded by failure in companies internal control structures. (Directorship Journal, 2003)
Easy Way Fitness Co. Ltd shall be a wholly owned Ghanaian establishment, which will be incorporated under the Companies Code (1963), Act 179. The business shall be registered at the Registrar General’s Department.
The Company shall be governed by policies, rules and regulations stipulated in the Companies Code as well as its Articles of Association.
The primary objective of an accounting function in an organisation is to process financial information about the activities of the organisation and prepare financial statements at the end of the accounting period. The modern method of accounting is based on the system created by an Italian monk Fra Luca Pacioli. He developed this system over 500 years ago. This great and scientific system was so well designed that even modern accounting principles are based on it (deSantis, 2010).
Section 123 of Ghana’s Companies Code (1963), Act 179 obliges all companies to keep proper books of accounts with respect to their financial positions and changes therein. These books shall be kept in respect of all sums of money received and expended by, or on behalf of the company and the matters in respect of which the receipt and expenditure takes place; all sales and purchases by the company of property, goods and services; the assets and liabilities of the company and the interests of the members therein.
