Figure 2.1 presents the business activities of purchasing department, receiving department and account payable department of ABC Limited. This might be important to note that this is a newly configured expenditure cycle using the basic technology. Figure 2.1. Expenditure Cycle of ABC Limited. Required: Which of the above functions must be performed by the cash disbursement department? Based on the above information, discuss the uncontrolled risks associated with the system as currently configured? And describe the controls that need to be implemented into the system to mitigate the risks in the given scenario.
Figure 2.1 presents the business activities of purchasing department, receiving department and account payable department of ABC Limited. This might be important to note that this is a newly configured expenditure cycle using the basic technology. Figure 2.1. Expenditure Cycle of ABC Limited. Required: Which of the above functions must be performed by the cash disbursement department? Based on the above information, discuss the uncontrolled risks associated with the system as currently configured? And describe the controls that need to be implemented into the system to mitigate the risks in the given scenario.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Figure 2.1 presents the business activities of purchasing department, receiving department and account payable department of ABC Limited. This might be important to note that this is a newly configured expenditure cycle using the basic technology.
Figure 2.1. Expenditure Cycle of ABC Limited.
Required:
- Which of the above functions must be performed by the cash disbursement department?
- Based on the above information, discuss the uncontrolled risks associated with the system as currently configured? And describe the controls that need to be implemented into the system to mitigate the risks in the given scenario.
Transcribed Image Text:Purchases Department
Inventory
Reconds
Identity as
and Select
Vendor
PO
PO
Vendor
Packing
Slip
Receiving Department
Packing
Sip
Prepare
Receiving
report
Rec
Repet
Reconcile
documents and
set up Liability
Rec
Repr
Invoice
Account Payable Department
Vendor
Rec
Reprt
Account
Payable
+0
Chock
On Due date
Remove ability
and Disburse cash
Vondor
Cash
Disbursements
Journal
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