List the deficiencies in internal control as per the given flowchart also includes whether these deficiencies are resulting from activities performed or not.

Question

Want to see the full answer?

Answer 1

Question

Chapter 12, Problem 25DQP

To determine

List the deficiencies in internal control as per the given flowchart also includes whether these deficiencies are resulting from activities performed or not.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

You have determined that the purchases system operates as follows: • When materials are required for production, the production manager sends a handwritten note to the buying manager. For orders of other items, the department manager or managing director sends a handwritten note to the buying manager. The buying manager finds a suitable supplier and raises a purchase order. The purchase orders are signed by the managing director. Purchase orders are not issued for all goods and services received by the company.• Materials for production are received by the Goods Received Department, who issue a goods received note (GRN), and sends a copy to the accounts clerk. There is no system for recording receipt of other goods and services.• The accounts clerk receives the purchase invoice and matches it with goods received notes and purchase order (if available). The managing director authorises the invoice for posting to the purchase ledger.• The accounts clerk analyses the invoice into relevant…

Lee Wong, CPA, is auditing the financial statements of the Alexandria Corporation, which has a batch-processing IT-based system for shipping and invoicing that it purchased from a software vendor. The following comments have been extracted from Wong’s notes on IT operations and the processing and control of shipping notices and customer invoices. Each type of computer run is assigned to a specific employee who is responsible for making program changes, running the program, and answering questions. This procedure has the advantage of eliminating the need for records of IT operations because each employee is responsible for his or her own computer runs. At least one IT department employee remains in the computer room during office hours, and only IT department employees have keys to the computer room. The corporation considered the desirability of program controls but decided to retain the manual controls in place prior to the conversion to the software vendor’s system. Company products…

The management of Swan Limited, has engaged you to review internal control over purchase,receipt, storage and issue of materials. You have prepared the following comments that describesSwan’s procedures.Raw materials, which consist mainly of high cost electronic components, are kept in a lockedstore room. The store room personnel include a supervisor and four clerks. All are well trained,competent and adequately bonded. Raw materials are removed from the storeroom only uponwritten or oral authorization of one of the production supervisors.There are no perpetual inventory records; hence, the storeroom clerks do not keep records ofgoods received or issued. To compensate for the lack of perpetual records, a physical inventorycount is taken monthly by the store room clerks who are well supervised. Appropriate proceduresare followed in making the inventory count.After the physical count, the store room supervisor matches the quantity counted againstpredetermined reorder levels. If the…