Auditing the Food and Beverage Operation
An Operational Audit Approach
Volume I
Hans Steiniger, Certified Public Accountant, Certified Internal Auditor
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Volume I consists of Chapters 1 Ė 12. It begins with a discussion of how Operational
Auditing differs from Financial Auditing, how the auditor uses a notebook computer in auditing the food and beverage operation, discussions with employees regarding internal operating controls and operating procedures, reviewing financial statements for trends in profitability, and advising local management of the auditís progress.

Audit workpapers are the evidence the auditor uses to support her findings in her audit of the restaurant. This chapter discusses setting up the audit workpaper binder, audit programs, organizing and indexing audit workpapers, headings, cross referencing, and sign offs.

An efficient audit begins with thorough planning prior to arrival at the restaurant. The text book discusses the work to be performed at the home office, i.e. updating the permanent file, selecting samples, reviewing financial statements, and writing a planning memo.

The Cash chapter includes discussions on Counting the Operating Fund in the restaurant, Cash Room Security, Cash Operations, On Site Checking Account, Petty Cash Expenditures, Credit Card Procedures, and Bank Reconciliation.

The Accounts Receivable chapter discusses Granting Credit, Invoicing, Posting Payments, Collecting Past Due Accounts, Bad Debt, and Advance Deposits.

Capital Expenditures covers the restaurant's Capital Budget, Competitive Bidding, Documentation, Approvals, Cost Overruns, Receiving, Auditor Review, Retirements, and the Fixed Asset Inventory.

Purchasing & Receiving covers National Suppliers, Soliciting Bids, Purchase Orders, Approvals, Receiving, Delivery Shortages, and Product Storage.

The Accounts Payable & Manual Checks chapter covers the Food and Beverage Operation's Invoice Testing Audit Workpaper, Invoice Processing and Posting, Travel Expenses, Controller Review, and Check Security.

Food Warehouse discusses Warehouse Operations, Dry Goods Room, Coolers, Freezers, Stock Rotation, Product Issuances, Security, and Automated Inventory Control Systems.

Bar Operations covers the restaurant's Liquor Room Controls, Liquor and Beer Metering Systems, Wine Usage, Portion Control and Bar Operation Controls.

The Sales chapter discusses Point of Sale Systems, Cash Registers, Guest Check Controls, Charge Tips, Daily Sales Journal, Counterfeit Currency, Secret Shopper Services, Comps, Gift Certificates, Sublet Revenues, and Valet Parking.

The Inventories chapter covers Counting & Recording, Physical Inventory Observations at the Restaurant, Test Counts, Final Inventory Listing, Automated Systems, Inventory Costing, Calculating Product Cost, Spoilage, and Accounting for Employee Meals.



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