Vendor Purchases Inventory Control Receiving Accounts Payable Cash Disbursments General Ledger Goods Arrive Purchasing Prepares Three Copies of PO from Vendor Purchase Order with Packing Slip Packing Slip Cash Disbursement Voucher Invoice Inventory Ledger Purchase Order AP Ledger Check Соpy Purchase Order Purchase Order Receiving Report Cash General Disbursement Check Ledger Voucher Cash Invoice Disbursement Voucher Invoice Check Check Соpy Соpy Check

Vendor Purchases Inventory Control Receiving Accounts Payable Cash Disbursments General Ledger Goods Arrive Purchasing Prepares Three Copies of PO from Vendor Purchase Order with Packing Slip Packing Slip Cash Disbursement Voucher Invoice Inventory Ledger Purchase Order AP Ledger Check Соpy Purchase Order Purchase Order Receiving Report Cash General Disbursement Check Ledger Voucher Cash Invoice Disbursement Voucher Invoice Check Check Соpy Соpy Check

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Using the flowchart of a purchases system, identify six major control weaknesses in the system. Discuss and classify each weakness in accordance with SAS 78/COSO.

Vendor
Purchases Inventory Control
Receiving
Accounts Payable Cash Disbursments
General Ledger
Goods Arrive
Purchasing
Prepares Three
Copies of PO
from Vendor
Purchase
Order
with Packing Slip
Packing
Slip
Cash
Disbursement
Voucher
Invoice
Inventory
Ledger
Purchase
Order
AP Ledger
Check
Соpy
Purchase
Order
Purchase
Order
Receiving
Report
Cash
General
Disbursement
Check
Ledger
Voucher
Cash
Invoice
Disbursement
Voucher
Invoice
Check
Check
Соpy
Соpy
Check

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