BU547 Lecture Notes - Lecture 8: Price Gouging, Internal Audit, Purchase Order
Document Summary
The key controls for each of the business functions: (1) authorization of purchases (2) processing vendor master file changes (segregated function) (3) timely recording and independent review of transactions (4) authorization of payments. Mentioned that we are helping ted so that he can present to the audit committee that his international controls are in accordance with the company"s objectives. Required (1) analysis of the purchasing process, with regards to: Identifying the existing key internal controls within the purchasing process. Identify control weaknesses and provide recommendation for the purchasing cycle. Weakness: the requests are numbered by the purchasing clerk only as they are filled out. Implication: since the purchase requests are not pre-numbered, the clerk could assign the same number to two purchases or skip a number. There is a risk of a false order being processed in the case where two orders with the same number exist.