The internal controls of the revenue cycle of a Maltese five star hotel : a case study

Abstract

Purpose: The purpose of this dissertation is to evaluate the internal controls of the revenue cycle of a Maltese Five Star Hotel. The objectives of this study are to assess the control environment prevailing in the hotel, identify the strengths and weaknesses of the revenue controls which are currently in place and examine how existent controls can be improved and new controls can be installed. Design: A qualitative methodology was utilised for this study by conducting unstructured and semi-structured interviews with top management of the hotel particularly with the Financial Controller and the Consultant, amongst others. Secondary data was collected by means of literature reading from journals, online publications and books. Findings: The Five Star Hotel has appropriate policies and procedures which ensure that money is collected in a timely manner from all the revenue departments. It also has adequate segregation of duties in most of the departments. The Financial Controller is responsible to ensure that there is an internal control system whilst the Consultant is responsible to oversee that internal controls are being put into practice particularly from an operational standpoint. Conclusions: The Five Star Hotel has a strong system of controls which is mainly composed of a sound administrative leadership and adequate policies and procedures. Nevertheless, given the inherent risks which are present in the hospitality industry, Management needs to adjust and update existing controls as deemed necessary. Value: Revenue maximisation and minimization of fraud can be achieved by keeping abreast with the latest requirements alongside an efficient internal control system.