Please solve all questions. Besi Buruk is a leading manufacturer of steel furniture. While the company has manufacturing plants and distribution facilities throughout the Malaysia, the purchasing, accounting, and treasury functions are centralized at corporate headquarters. While discussing the management letter with the external auditors, Belimbing Besi, controller of Besi Buruk, became aware of potential problems with the accounts payable system. The auditors had to perform additional audit procedures to attest to the validity of accounts payable and cutoff procedures. The auditors have recommended that a detailed systems study be made of the current procedures. Such a study would not only assess the exposure of the company to potential embezzlement and fraud, but would also identify ways to improve management controls. Belimbing Besi has assigned the study task to Jambu Batu, a relatively new accountant in the department. Because Jambu Batu could not find adequate documentation of the accounts payable procedures, she interviewed those employees involved and constructed a flowchart of the current system. This flowchart is presented on the following page. A description of the current procedures is as follow. Computer Resources Available The host computer mainframe is located at corporate headquarters with interactive, remote job- entry terminals at each branch location. In general, data entry occurs at the source and is transmitted to an integrated database maintained on the host computer. Data transmission is made between the branch offices and the host computer over leased telephone lines. The software allows flexibility for managing user access and editing data input. Procedures for Purchasing Raw Materials Production orders and appropriate bills of materials are generated by the host computer at corporate headquarters. Based on these bills of material, purchase orders for raw materials are generated by the centralized purchasing function and mailed directly to the vendors. Each purchase order instructs the vendor to ship the materials directly to the appropriate manufacturing plant. Assuming that the necessary purchase orders have been issued, the manufacturing plants proceed with the production orders received from corporate headquarters. When goods are received, the manufacturing plant examines and verifies the count to the packing slip and transmits the receiving data to accounts payable at corporate headquarters. In the event that raw material deliveries fall behind production, each branch manager is given the authority to order materials and issue emergency purchase orders directly to the vendors. Data about the emergency orders and verification of materials receipt are transmitted via computer to accounts payable at corporate headquarters. Since the company employs a computerized perpetual inventory system, physical counts of raw materials are deemed not to be cost- effective and are not performed. Accounts Payable Procedures Vendor invoices are mailed directly to corporate headquarters and entered by accounts payable personnel when received; this often occurs before the receiving data are transmitted from the branch offices. The final day of the invoice term for payment is entered as the payment due date. This due date must often be calculated by the data entry person using information listed on the invoice. Once a week, invoices due the following week are printed in chronological entry order on a payment listing, and the corresponding checks are drawn. The checks and the payment listing are sent to the treasurer’s office for signing and mailing to the payee. The check number is printed by the computer and displayed on the check, and the payment listing is validated as the checks are signed. After the checks are mailed, the payment listing is returned to accounts payable for filing. When there is insufficient cash to pay all the invoices, certain checks and the payment listing are retained by the treasurer until all checks can be paid. When the remaining checks are mailed, the listing is then returned to accounts payable. Often, weekly check mailings include a few checks from the previous week, but rarely are there more than two weekly listings involved.   When accounts payable receives the payment listing back from the treasurer’s office, the expenses are distributed, coded, and posted to the appropriate plant or cost center accounts. Weekly summary performance reports are processed by accounts payable for each cost center and branch location reflecting all data entry to that point.   Required: a. Discuss and explain with examples THREE (3) situations where might be exposed to fraud and provide recommendation to Besi Buruk Corporation for improvement. b. Discuss and provide explaination THREE (3) areas that will distort due to weaknesses the procedures of internal control and recommend improvements to correct it. c. Discuss and explain with relavent information THREE (3) strengths in the procedures described