Saint Louis College

Carlatan, City of San Fernando, La Union

College of Commerce, Secretarial and Accountancy

EMANCIPATORS MULTI-PURPOSE COOPERATIVE

An Internal Control Study

Presented to the Faculty of the

College of Commerce, Secretarial and Accountancy

In Partial Fulfillment of the Requirements for the Course

Audit 1a & b: Auditing and Assurance Service, pt.1

Submitted by:

Abaga, Jolina Grace G.

Abobo, Danah Mae P.

Costales, Daphne Maureen B.

de Austria, Via Samantha B.

Lobingco, Kimberly Jean C.

Submitted to:

Mrs. Merish Dinah A. Rebuldela, CPA, MBA

 February 2017

ACKNOWLEDGMENT

This internal control study is made possible with the combined efforts of

the members of the group. The members would like to acknowledge the

different people and entities who became part of the realization of the

members goal, each of these people generously shared their guidance and time

to the members. In particular, the members would like to thank the following:

To the Almighty Father who imparted courage, strength, determination

and wisdom to the student auditors in order to face all the challenges

and problems encountered in the completion of this academic endeavor.

To the management of the Emancipators Multi-Purpose Cooperative,

especially to Mrs. Corazon C. Daquep, Mrs. Madeline R. Tanguilig, Mrs.

Leovic J. Ancheta and Engr. Melchor P. Dorao, for their trust and

confidence in sharing the necessary information needed by the members,

and also for their hospitality to the members despite their schedules.
To the adviser, Mrs. Merish Dinah A. Rebuldela, CPA, MBA, for her

unwavering encouragement, support and love for her students.

To the student auditors parents, for their never-ending support, love,

encouragement and financial help to the researchers during the course

of completion of this study.

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 To the student auditors peers, who gave them solace and succor to

accomplish this study.

The Student Auditors

DEDICATION

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 SCOPE AND DELIMITATION

We have studied the nature of business operation of Emancipators Multi-

Purpose Cooperative to determine the effectiveness of its internal control

system as to adherence to policies and standards, enforcement of rules and

regulations and employment of accounting system and information processing.

This study focuses only to the evaluation and assessment of the

components of internal control which are control environment, risk

assessment, information and communication processing, control activities and

monitoring by adequate planning and performance of audit procedures like

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observation, inquiry and inspection to provide reasonable assurance in giving

an opinion as to whether the operation procedures are effective and viable.

This study gave emphasis only in one activity of the cooperative which is

their Lending Activity.

TABLE OF CONTENTS

Title Page..i

Acknowledgement.ii

Dedication..iii

Scope and Limitation..iv

Table of Contents.....v

List of Figures..vii

List of Tables...viii

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Audit Plan..ix

Chapter 1 Company Profile..1

I. Brief History..2

II. Vision and Mission Statement...4

III. Services Offered...5

IV. Location and Contact Information.8

Chapter 2 Internal Control and Company Business Operations..10

I. Internal Control.10

A. Control Environment..11

B. Risk Assessment..22

C. Information and Communication System23

D. Control Activities..24

E. Monitoring.....27

II. Accounting Operations28

A. Revenue and Collection Cycle.28

B. Purchases and Disbursement Cycle.35

C. Payroll Cycle.39

Chapter 3 Strengths, Weaknesses, Opportunities

and Threats Analysis ...42

Chapter 4 Recommendations and Conclusion.

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APPENDICES......

A. Endorsement Letter..

B. Engagement Letter...

C. Documents..

D. Documentations..

E. Questionnaires.

Curriculum Vitae

LIST OF FIGURES

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Figure Title Page

1.1 Company Logo..4

1.2 Location Map.......8

2.1 Organizational Structure....14

2.2 Revenue Cycle for Loan less than Php 100,000.00.31

2.3 Revenue Cycle for Loan more than Php 100,000.00..33

2.4 Purchase and Disbursement Cycle..37

2.5 Payroll Cycle.40

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 LIST OF TABLES

Table Title Page

1 Audit Plan.....ix

1.1 Types of Loan Offered.....5

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 Audit Plan

Subject Matter:

Emancipation Muti-Purpose Cooperative

The Student Audit Team:

Team Leader: DE AUSTRIA, Via Samantha B.

Members: ABAGA, Jolina Grace G.

ABOBO, Danah Mae P.

COSTALES, Daphne Maureen B.

LOBINCO, Kimberly Jean C.

Objectives: To be able to plan the study of Emancipation Muti-Purpose

Cooperative.

Table 1 Audit Plan

Date Specific Activity Key Estimated

Objective Person Expenses

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 Involved
November To search for a Find a All Php 80.00

21-26, company to study company and

2016 and ask for their ask for

approval. approval for

the study of

their internal

control.
November To finish, submit Give the All Php

28 and distribute the endorsement 125.00

December endorsement letter and

1, 2016 letter and engagement

engagement letter. letter.

December To finish the Make All Php

26-30, questionnaires for questionnaires 100.00

2016 information for Company

gathering for Profile and

Company Profile Business

(Chapter 1) and Operations.

Company

Business

Operations

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 (Chapter 2).
January To gather All Php

2-6, 2017 information for 150.00

Company Profile

and Business

Operations.
January To search for a Find a All Php

7-9, 2017 company to study company and 200.00

and ask for their ask for

approval. approval for

the study of

their internal

control.
January To distribute Give the All Php 50.00

10-13, endorsement endorsement

2017 letter, engagement letter and

letter to new engagement

company and ask letter and

for scheduled scheduled a

interview. date for

interview.
January To gather Interview the All Php 70.00

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24, 2017 information for manager,

Company Profile supervisor

and Business and staff.

Operations.
January To be able to Able to finish All Php

27-29, finish the Chapter 1 and 100.00

2017 Company Profile 2.

(Chapter 1) and

Company

Business

Operations

(Chapter 2) of the

study.
February To be able to Able to finish All Php

10, 2017 finish the SWOT Chapter 3. 100.00

(Chapter 3) and

Conclusion and

Recommendation

s (Chapter 4) of

the study.
February To be able to Able to finish All Php 50.00

13, 2017 finish Chapter 4 Chapter 4.

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 of the study.
February To be able to Finalized the All Php 50.00

14, 2017 finalize the paper paper works.

works and print.

February Find an expert to Found All Php 50.00

15, 2017 proofread the someone to

study. proofread the

study.
February To be able to Able to All Php

16, 2017 complete the complete and 100.00

study and have a print the

hard copy. study.

February Submission of Passed the All Php 0.00

17, 2017 final manuscript. study.

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