I need help on how to approach this issue. I read accounting but never practiced in any firm at all. Recently a friend opened a hotel and he asked for my assistance in auditing and accounting. I don't know exactly where to start. Our meeting day is tomorrow. My plan was to tell him to get an acvountant that will set up internal control ..before talking about an auditor....I understand there are other type of auditors in a hotel. But the auditor I know is the internal and external auditor . One hired by management infact he is a company staff called internal auditor while as external is hired to give a second professional opinion of the job done by internal auditors.Anyone who has experience with hotels auditing and accounting should pls help out. .I don't want him to be disappointed that I have nothing to offer

I am an accountant too !
what do you really wanna know ?

wow, I do not have experience with hotel accounting and auditing but since within hospitality, we should be able to figure it out ...

Meanwhile, the external auditor is not engaged to give second opinion ooo, he is engaged as an "independent auditor" to provide "an opinion" on the financial statement of the hotel !!

The internal auditor being a dependent (Management) auditor .......

DonroxyII:
I am an accountant too !
what do you really wanna know ?

Thank you sir. Just put yourself in my shoes..I have not worked in any firm on account related job. He only heard I read account and he now believe I can help him audit his hotel . He said he wanna be sure the staff are not cheating him. Tomorrow I will be meeting him in the hotel. Where do i start from in trying to help him out? I don't even know if he has accounting dept or not. Just give me format to follow in other to be of help to him

If it's a new hotel like you said, then I don't think there's need for an auditor. Let him get a trustworthy accountant to oversee his accounts.

Tell your friend that you know nothing about auditing. There's no shame in that. Make him understand that auditing is a field on it's own, different from accounting.

On the accounting aspect, lack of practical exposure is no excuse. That you have not handled a company's account in real life, does not mean you cannot.

Accounting is a practical course. You make a sale you credit your sales account with the amount. If it's a cash sale, you debt your cash account. If its a credit sale, you debit debtor (Account receivable). The same way you do it in theory, is exactly the same way you do it in practice. You only have problems if you're not grounded in the double entry principles.

Thank God for accounting software, as long as you can click, you can generate all kinds of financial reports.

I hope that helps. If you need further assistance, contact me: patrickokunima@gmail.com

PatrickOkunima:
If it's a new hotel like you said, then I don't think there's need for an auditor.

Tell your friend that you know nothing about auditing. There's no shame in that. Make him understand that auditing is a field on it's own, different from accounting.

On the accounting aspect, lack of practical exposure is no excuse. That you have not handled a company's account in real life, does not mean you cannot.

Accounting is a practical course. You make a sale you credit your sales account with the amount. If it's a cash sale, you debt your cash account. If its a credit sale, you debit debtor (Account receivable). The same way you do it in theory, is exactly the same way you do it in practice. You only have problems if you're not grounded in the double entry principles.

Thank God for accounting software, as long as you can click, you can generate all kinds of financial reports.

I hope that helps. If you need further assistance, contact me: patrickokunima@gmail.com

I feel he wants a monthly account report to enable him know how his business is going. But I am not interested in book keeping . I know I can still refresh my memory and prepare monthly profit and loss acct for me. The truth is that I don't wanna be his permanent staff...I run my own things

DonroxyII:
I am an accountant too !
what do you really wanna know ?

wow, I do not have experience with hotel accounting and auditing but since within hospitality, we should be able to figure it out ...

Meanwhile, the external auditor is not engaged to give second opinion ooo, he is engaged as an "independent auditor" to provide "an opinion" on the financial statement of the hotel !!

The internal auditor being a dependent (Management) auditor .......

I argued this with my lecturer and he said that second professional opinion is an essential part of hiring external auditor. He will looking to what the internal auditor did to ascertain if he complied substantially with the standard.

greggng:


I feel he wants a monthly account report to enable him know how his business is going. But I am not interested in book keeping. I know I can still refresh my memory and prepare monthly profit and loss acct for me. The truth is that I don't wanna be his permanent staff...I run my own things

Advice him to get a full-time accountant. Where's the business located?

greggng:


I feel he wants a monthly account report to enable him know how his business is going. But I am not interested in book keeping. I know I can still refresh my memory and prepare monthly profit and loss acct for me. The truth is that I don't wanna be his permanent staff...I run my own things

Advice him to get an in-house accountant, if he doesn't have one already. Where's the hotel located?

First thing is to set up account for the hotel.

The easiest way to do this is by using a simple accounting software like Peachtree.

You can get one from software seller around your area.

With bank statement and share capital and begining asset of the hotel you can set up the account.

What he actually need at this level is asset record verification, validation and valuation.

In case you still need more help and clarification, just ask and I will try to answer.

I'm a start-up business financial consultant.

PatrickOkunima:


Advice him to get an in-house accountant, if he doesn't have one already. Where's the hotel located?

In Lagos a place called ayobo

SocialFinance:
First thing is to set up account for the hotel.

The easiest way to do this is by using a simple accounting software like Peachtree.

You can get one from software seller around your area.

With bank statement and share capital and begining asset of the hotel you can set up the account.

What he actually need at this level is asset record verification, validation and valuation.

In case you still need more help and clarification, just ask and I will try to answer.

I'm a start-up business financial consultant.

Can you pls whatsap me cos you seem to have more idea. I like the start up financial consultant. I might tell him we will need the services of a start up financial consultant . Would you be able to make yourself available to negotiate and put up a system for him? So that I can learn from your experience as you are doing it

greggng:


In Lagos a place called ayobo

Okay.

greggng:


Thank you sir. Just put yourself in my shoes..I have not worked in any firm on account related job. He only heard I read account and he now believe I can help him audit his hotel . He said he wanna be sure the staff are not cheating him. Tomorrow I will be meeting him in the hotel. Where do i start from in trying to help him out? I don't even knowif he has accounting dept or not. Just give me format to follow in other to be of help to him

The truth is if he doesn't have an internal control system, it is gonna be difficult ...... All you can do is check the lodgement/Customer registers, ask him and the staffs on average customer turnover on daily , weekly and monthly.

Does he have a kinda register and receipts provided for them..... Does he operate a kitchen/restaurants for customers ......

If all the above ain't present, you can help him to set it up then he should employ an accountants even OND holder against future audit !!

greggng:

I argued this with my lecturer and he said that second professional opinion is an essential part of hiring external auditor. He will looking to what the internal auditor did to ascertain if he complied substantially with the standard.

lol, Professionally, "Second opinion" .... is a wrong assertion as per professional relationship between an internal auditor and an external auditor ....

An internal auditor sole responsibility is to protect management by ensuring the account department complied with all rules and regulations (Internal control procedures) set up by management ..... Internal auditor is not set up to give opinion on the financial statement ......

Meanwhile External "Independent" Auditor is established to protect shareholders/owners of the company against Management .... especially where Ownership is separated from management ...

This is not an issue of second Opinion ....

The person taking care of his accounting book is a mathematician without accounting knowledge. He said the account does not balance ...he suspect they are eating his money.. I suggested to a close friend of his whom he sent to me, to tell him to hire an accountant that will set up internal control system for him. Any qualified person here who can handle this task perfectly should whatsap me on 08062593234. I told him I will get someone experienced to fix the abnormalises and we will negotiate on a charge for the work done. The lady can under study us.

greggng:



Can you pls whatsap me cos you seem to have more idea. I like the start up financial consultant. I might tell him we will need the services of a start up financial consultant . Would you be able to make yourself available to negotiate and put up a system for him? So that I can learn from your experience as you are doing it

You can contact me on 08one30780722. Both call and WhatsApp.

Tomorrow btw 7 and 8am or from 11am to 12noon

Again, no need of external auditors at this level but to set up a balanced account.

Tell your friend to get Peachtree. I have a copy that can be used on standalone or server.

DonroxyII:
The truth is if he doesn't have an internal control system, it is gonna be difficult ...... All you can do is check the lodgement/Customer registers, ask him and the staffs on average customer turnover on daily , weekly and monthly.

Does he have a kinda register and receipts provided for them..... Does he operate a kitchen/restaurants for customers ......

If all the above ain't present, you can help him to set it up then he should employ an accountants even OND holder against future audit !!

The above comment is the main issue to consider. Accounting/Audit system cannot be built without original source document generated and approved via control system. To record transactions, there must document to prove such transaction and to audit a transaction there must be original document to cast back(vouch) that such transaction actually happened. There are many details required for this which no single post can capture but at least advice him thus:

For him to come close to achieving his objective of not being cheated, he must apply the principle of "separation of roles" in the issue of finance/money of the hotel; the person who initiate the transaction will not the person to approve it and possibly a different person to carry out the transaction ( assuming no collusion or exchange of information among the persons involved). All transaction, I repeat , all transactions must be invoiced and if possible mount a camera at the payment points


1. Currently, does the hotel has a list/invoices/receipt of daily income and expenses.
2. All assets acquired so far, does the hotel has the receipt or at least information where it was bought from
3. Is there any method of approving money going in and out of the hotel on daily basis
4. Those money going in or out , do they have documents ( vouchers, invoices,receipts, bank receipt/transfer records etc) documented to back them.
5. Is there anyone overseeing that money is utilized for whatever purpose it was meant for and that the hotel is not cheated in any way. Eg if 50 litre of diesel is approved to run the generator set, was 5o litres actually bought? Same for kitchen items and other resourced used to run the hotel

He need to get an accountant with little fee to design his charts of accounts and then get book-keeper to be entering those transaction. He need to do this urgently before "WE" come for our "TAX" because if there are no records to base our assessment when we come, we will give the hotel BOJ tax assessment (lol shikina)

CAVEAT EMPTOR: I am a baby accountant, an astute tax man, a webmaster, a software architect, a car tech, a professional talkative all bundled into one person. Don't you think I am a confused person?

udokpuenyi:


CAVEAT EMPTOR: I am a baby accountant, an astute tax man, a webmaster, a software architect, a car tech, a professional talkative all bundled into one person. Don't you think I am a confused person?

Lol, thanks so much for your detailed contribution...... you are more than a baby accountant and you ain't a confused person .....it's just passion.....!!

I only provided synopsis of what the op needed so he can have an understanding of what he wants to do and should do .... as per ISA 315/330 ... lol !!

I am an ICAN student ooo (Final stage) but with M.sc Accounting now planning to delve into Tech and multi languages ..... God bless our hustles.... we ain't confuse

udokpuenyi:


The above comment is the main issue to consider. Accounting/Audit system cannot be built without original source document generated and approved via control system. To record transactions, there must document to prove such transaction and to audit a transaction there must be original document to cast back(vouch) that such transaction actually happened. There are many details required for this which no single post can capture but at least advice him thus:

For him to come close to achieving his objective of not being cheated, he must apply the principle of "separation of roles" in the issue of finance/money of the hotel; the person who initiate the transaction will not the person to approve it and possibly a different person to carry out the transaction ( assuming no collusion or exchange of information among the persons involved). All transaction, I repeat , all transactions must be invoiced and if possible mount a camera at the payment points


1. Currently, does the hotel has a list/invoices/receipt of daily income and expenses.
2. All assets acquired so far, does the hotel has the receipt or at least information where it was bought from
3. Is there any method of approving money going in and out of the hotel on daily basis
4. Those money going in or out , do they have documents ( vouchers, invoices,receipts, bank receipt/transfer records etc) documented to back them.
5. Is there anyone overseeing that money is utilized for whatever purpose it was meant for and that the hotel is not cheated in any way. Eg if 50 litre of diesel is approved to run the generator set, was 5o litres actually bought? Same for kitchen items and other resourced used to run the hotel

He need to get an accountant with little fee to design his charts of accounts and then get book-keeper to be entering those transaction. He need to do this urgently before "WE" come for our "TAX" because if there are no records to base our assessment when we come, we will give the hotel BOJ tax assessment (lol shikina)

CAVEAT EMPTOR: I am a baby accountant, an astute tax man, a webmaster, a software architect, a car tech, a professional talkative all bundled into one person. Don't you think I am a confused person?

Detailed and nice.

System and controls are very important if an organisation wish to achieve their objectives. Control can be grouped using the acronym PAPAMOSSAB, i.e
P- Personnel Control; Are the staff armed with right skills?
A- Accounting and Arithmetic; casting and recasting
P- Physical Control; restriction of some staff to unauthorized area, existence of asset etc
M-Management control; these are the control set up by the management. it means review of system such as regular review of report etc
O- Organisation Control; A company without a structure or clear lay out of duties give rooms for a lot of things.
S-Segregation of Duties; A staff should not be allow to start a transaction and end the transaction.
S-Supervision control; This helps to reduce errors or unpleasant situation.
A-Acknowledgement of Performance; Staff show always sign and write their name against the signature to show that they are the one that carried out the function.
B-Budget and Budgetary Control; Always have a workable budget to compare the actual with in other to ascertain your variance.

Example of control over cash;
1. There must be daily cash count at the end of the day
2. Records for cash book or petty cash must be up to date
3. There must be third party evidence to proof money was spent on the purpose it was issued for.
4. The safe should have two keys hold by different people.
5. Good safeguarding for the cash
6. Limit access of unauthorized staff to the cash
7. Approval and authorization from the right staff before disbursement of cash
8. Set maximum cash that can be disburse in a slip
9. Set maximum cash to hold at a particular point in time after which it must be log to the bank
10. Set maximum and minimum amount for petty cash etc

Note: Controls are going to limit the chance of exposure to risk but can not totally remove the risk.