Section 1 – Existing Key Internal Controls
Key Control Control Objective Reasoning Test of Control
Once purchasing requests are received, the purchasing manager reviews and authorizes them. If approved, these will be forwarded to the buyers. Proper approval of all transactions This control ensures confirmation and authorization of all the purchase transactions. This increases the protection from errors and frauds, such as preventing inaccurate information from entering the Integrated Measurement Systems Inc.’s (IMS) documents and records. Verifying the purchasing requests (approved by purchasing manager) with their corresponding documents, such as purchase requests forms (approved by purchasing clerk), to reduce the likelihood of unapproved transactions in the purchasing department.
After the purchasing clerk confirms the signatures of each purchase request and have pre numbered the approved purchase orders, he/she keeps and files copies of the purchasing requests and purchasing orders. Accuracy and completeness of books and records This control checks all pre numbered documents, such as receipts and checks, are properly authorized. This decreases the possibility of unauthorized transactions from entering IMS’s records. Match the purchasing requests and purchasing orders documents with IMS’s corresponding filed copies to ensure that no unauthorized transactions have occurred.
The purchasing clerk approves the filed copies of the purchasing request and purchase order by
Auto-sourced Purchase Order – these are purchase orders that do not require purchasing approval prior to being sourced and dispatched to suppliers.
Sales invoices are prepared in batches on a daily basis using numbered sales invoices. Sales invoice numbers are automatically generated by the company’s computer system. The accounts receivable clerk does not have appropriate computer rights to override the computer-generated invoice number. Upon preparing sales invoices, the accounts receivable clerk verifies that the first invoice number of the batch is consistent with the last invoice number of the previous batch. Inconsistencies or skipped sales invoice numbers are investigated and resolved before new sales invoices are prepared. The items shipped are compared to the items billed for proper quantity, price, and other sales order terms.
inputting their credit card number. Customer’s orders are processed immediately. Books in stock are packaged and mailed the same day. When their order has been shipped,
One of the greatest strengths of the internal control procedures for sales of Kornsen Industries is that the sales clerk creates a multi-copy sales order form. This is an important step and allows effective communication at all levels of the organization. Also, it gives the customer the opportunity to verify if the information in
Q1. I classified the following controls based on what I read in appendix 1. For IT General Control, it talks to controls that are set in place so that a client's IT system operates correctly. These controls primarily focus on ensuring that changes to applications are properly authorized, tested, and approved before they are implemented and that only authorized persons and applications have access to data, and then only to perform specifically defined functions. Because of this, the physical access to the server room has been classified as an IT General Control. For Application Control, it talks more to automated controls that apply to the processing of individual transactions. They include such controls as edit checks, validations,
A CEO, or President should be the one who approves the payment, or have a separate manager look over the purchases before approving the payment. It doesn’t cause any problems that are noticeable at first, or ever. But he can easily order unnecessary things. For example, he could order one extra of one small items, and continuously do that and pocket the items. Or he could just simply over order, and possibly even under order on items. Having somebody just double check his order sheet and approve it would be the most ideal situation, and even running it by a President or CEO would be the absolute best situation so there are now flaws in the order history and no money goes missing, and the supplies, and all products bought are
One satisfied control objective is the completeness of the transaction. Using a receipt creates a written record of the transaction. Because receipts are pre-numbered, each receipt is paired with a specific check or amount of cash. This allows there to be a reconciliation between the total deposited at the bank, and total recorded on the receipts. Pre-numbering also aids with the existence objective. It prevents someone from throwing the receipt away because you can easily see that there is a missing receipt. A third objective is a segregation
Part 1: The Vendor Contract Administrator will complete the Request Form and submit the form to the Vendor Program Manager
I wrote a purchase order for a chiller roll up access door for a data center project. A purchase order is generated by the buyer and sent to the seller. When accepted by a seller it generates a binding agreement for a set cost, quantity and terms for the materials and equipment exchanged.
The Contract is awarded to the Approved Contractor after reaching satisfaction that expectations can be met and mutually agreeable terms have been achieved during the Pre-Award Meeting. Procurement will coordinate the preparation of Contract documents.
・Perform a three-way match: Take a sample of transactions from purchases journal and agree with Suppliers invoice, Purchase order and Goods Received Note
Almost all purchasing decisions include factors such as delivery and handling, marginal benefit, and price fluctuations. Procurement generally involves making buying decisions under conditions of scarcity. If good data is available, it is good practice to make use of economic analysis methods such as cost-benefit analysis or cost-utility analysis.
The Internal Revenue Service is trying to preserve and protect the availability, confidentiality, integrity, authentication, authorization and security controls of all employees and also the taxpayers. In the context of IRS information security, availability is generally expressed as the amount of time users can use a system, application and data, where user refers employees and taxpayers. Integrity refers the validity and accuracy of data. For IRS, data and information are intellectual property assets. Unauthorized changes can undermine the data’s values which be a serious threat to an organizations. Similarly, confidentiality protecting information from everyone except those with rights to it. IRS is making online communication with users and employees in terms of enter private data into IRS web site. A security control is something an organization does to help reduce those risk.
After getting the P.O (Purchase order) vendor get the product and delivered it to the main office where the I.T Store exist.
The system can then access the online purchase order and receiving files and check the match of items, quantities, and prices.