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Chapter 4 page 130
6. SOLUTION TO GREEN PRODUCTS GARDEN SUPPLY
a), b) see the following pages
c) Internal Control Weaknesses
Chapter 4 page 131
Chapter 4 page 132
d) Flowchart of revised system
7. SOLUTION TO CUSTOM FABRICATIONS
a), b), see the diagrams on the following pages.
C and d) Internal Control Weaknesses and Risks:
Chapter 4 page 133
2) The accounts payable department creates a liability in their records with
only the receiving report and vendor’s invoice. No three way match.
3) The warehouse receives the goods and prepares the receiving report.
No formal and separate receiving function.
4) The receiving report is prepared based on packing slip. No blind Copy
of the PO.
5) The general ledger updates the inventory control account from the
receiving report. No journal voucher.
Chapter 4 page 134
Supplier
Receive Goods
Prepare Purchase
Order
Purchase Order Copy 1
Packing Slip
Purchase Order Copy 3
Inventory
Subsidiary
Monitor Inventory
Levels
Purchase Requisi!on
Inventory Levels
Purchase
Order File
Purchase Order Copy 2
Set Up Accounts
Payable
Receiving Report Copy 1
Invoice
AP Subsidiary
Post to General
Ledger
Receiving Report 3 General LedgerPos!ng Details
Voucher
Amount, Date
Update Inventory
Records
Receiving
Report
Copy 2
Inventory
Subsidiary
Quan!ty
Review Accounts
Due
Amount, Due Date
Prepare Cash
Disbursements
Voucher
SupplierCheck
Update Accounts
Payable Check Copy
Check Details
Summary
Expenditure Cycle DFD
CUSTOM FABRICATIONS
Chapter 4 page 135
Cash Disbursements System
Chapter 4 page 136
