4.

0 Issue/ Problem faced by entity

It is normal for business to have problem during running their business. There are
several problems that occur at Mygyc Gym. The problems are:
4.1.1

Over delegation of power

In Mygyc Gym, since the owners live far away from Puncak Alam, therefore
they delegate their power to the staffs. Basically the staffs have power to control
over daily activities of the business. All the operations are handling by the staffs.
There are lacks of supervision by the owner towards their staffs. Delegation of
power sometimes could be good to the business, but in this case shows that over
delegation of power gives negatively effects to the business. This is mainly due
to no specific task for each staffs. In other words, no segregation of duties
between the staffs as all staffs are responsible and doing for all works. All staffs
handling in sales as well as deposit the cash sales. This may lead to fraud since
manipulation of sales may occur within the staffs. The staffs open and closed the
gym by themselves. The other problem is some of the staffs sometimes are not
punctual and take granted with the opening time of the gym. (HIRING STAFF)

4.1.2

No proper documentation
In Mygyc Gym, there is no proper of documentation for the transactions occur.
The owner did records transactions, but sometimes there are a few items or
transactions havent been recorded. This is due to the owner have no
knowledge on accounting and they lack of expertise in handling the account. It
may give problem to calculate either the gym have reached breakeven or not
since the recording are not accurate.
4.1.3

Barrier with upper management

In Mygyc Gym, the staffs did mention that there is barrier between the owner
and staff. Since the owner is not always in the gym, therefore they have
problem to communicate efficiently with the owner. As said by the staff, there
is minor damage in one of the equipment at the gym. The problem is the owner
did not alert on what have been told by the staff. The owner took very slow
action to solve the issue even the staff has informed the owner many times.

5.0

Recommendation to improve the current situation for the sustainability of the

entity in the industry

5.0.1

Exert higher internal control

Mygyc Gym should implement higher internal control since there is delegation
of power towards their staffs. As in the gym, the owner has already put in cctv
inside the premise to monitor the gym operations as well as their staff.
Nevertheless, owner need to exert higher internal control to since put in cctv
only is not an effective way to monitor daily operations. Owner need to do a
spot check to ensure that the operation is in usual activity. Besides that, the
owner t needs to supervise their staffs regularly to ensure that their staffs are
doing work accordingly and correctly. Besides that, the owner need to ensure
that there is segregation of duties between the staffs.

5.0.2

Hired expertise
Since the owner has no any backgrounds in accounting, therefore he needs to
hire an expertise or accountant to keep and organize the account record. Apart
from that, proper filling is a must in a business. All the receipts and bills need
to be file in. Keeping the account safe and accurate is essential no overview
the financial performance of the business. Besides that, owner can make a
budget or planning strategies if the financial information is properly recorded.

5.0.3