When Mr. Avila orders materials for his construction business, he sends a duplicate copy of the purchase order to he receiving department. During the delivery of materials, Mr. Nobles, the receiving clerk, records the receipt of shipment of this purchase order. After recording, Mr. Nobles sends the purchase order to the accounting departm where it is used to record materials purchased and accounts payable. The materials are trasported to the storage area by forklifts. The additional purchased quantities are recorded on storage records. Required: Identify the weakness/weaknesses in internal control and opposite the identified weakness or weaknesses, enumerate the control procedure/s that you will recommend to avoid or mitigate the risk of loss.

When Mr. Avila orders materials for his construction business, he sends a duplicate copy of the purchase order to he receiving department. During the delivery of materials, Mr. Nobles, the receiving clerk, records the receipt of shipment of this purchase order. After recording, Mr. Nobles sends the purchase order to the accounting departm where it is used to record materials purchased and accounts payable. The materials are trasported to the storage area by forklifts. The additional purchased quantities are recorded on storage records. Required: Identify the weakness/weaknesses in internal control and opposite the identified weakness or weaknesses, enumerate the control procedure/s that you will recommend to avoid or mitigate the risk of loss.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: What error conditions need to be addressed? (What is an error condition?) For each, what do you…

A: Auditor is the independent professional who is CPA certified and has immense knowledge about the…

Q: At Freshplace Grocery, customers give their purchases to a sales clerk along with cash. The sales…

A: In this narrative, the entities are the people, places, or things that are involved in the process.…

Q: Kareem is writing and printing a check with QuickBooks for the first time. The check is for a…

A: In accounting, expenses are categorized as either direct or indirect. Direct expenses are those that…

Q: Examine the risks associated in this conversion cycle.

A: The term conversion cycle refers to the time period required for completing a production batch…

Q: d the Direct labor paid and assigned to Work in Process Inventory. Record the indirect labor paid…

A: Solution 1) Job 306 Job 307 Job 308 April Total From March Direct Materials 26000…

Q: Wilson Petroleum is a local distributor of home heating oil. The firm also installs and services…

A: The proposed installment of a new computer system is undoubtedly a capital budgeting decision, which…

Q: Avett Manufacturing Company allows employees to purchase materials, such as metal and lumber, for…

A: IMA: The institute of management accountants (IMA) is one of the top professional organizations for…

Q: Marketing system provides some useful insights regarding the sales order. Different departments use…

A: Business process refers to a set of tasks and activities to be performed with the help of various…

Q: Curtis, a maintenance supervisor, submitted maintenance invoices from a phony repair company and…

A: Answer: Option C

Q: When Mookie The Beagle Concierge started stocking Mookie The Beagle Concierge branded inventory. Cy…

A: Prepaid expenses It is the future expense that are paid in advance, such as rent or insurance. On…

Q: As the new staff person in your company’s treasury department, you have been asked to conduct…

A: International Financial Reporting Standards means accounting standards issued by International…

Q: You have been assigned to the audit of Carter Brandon Co (CBC), and you are drafting the audit for…

A: Audit: It is the investigation of the financials of the company for the required period. the company…

Q: Using the IMA’s four principles of ethical conduct, evaluate Brian’s behavior. Has he acted in an…

Q: An entrepreneur of a custom sign company is reviewing reports showing the cost of printing machines,…

A: The key purpose of accounting is providing information to the users. This is done by using the…

Q: Categorize each of the following activities into the expenditure, conversion, or revenue cycles, and…

A: The objective of this question is to categorize the given activities into the expenditure,…

Q: ABC Inc. is a company that transports packages (similar to UPS) and prides itself on having…

A: The objective of the question is to identify the tables and their corresponding fields/columns that…

Q: Avett Manufacturing Company allows employees to purchase materials, such as metal and lumber, for…

A: Brain has not acted in an ethical manner. He placed his personal interest above the company interest…

Q: All of the following are true concerning an invoice except: When a shipment arrives, the receiving…

A: An invoice is a commercial document issued by a seller to a buyer, indicating the products or…

Q: The procurement process for Omni Wholesale Company includes a series of activities that transforms a…

A: "Since you have asked a question with sub-parts more than three, as per guidelines, the first three…

Question

100%

When Mr. Avila orders materials for his construction business, he sends a duplicate copy of the purchase order to
the receiving department. During the delivery of materials, Mr. Nobles, the receiving clerk, records the receipt of
shipment of this purchase order. After recording, Mr. Nobles sends the purchase order to the accounting department
where it is used to record materials purchased and accounts payable. The materials are trasported to the storage
area by forklifts. The additional purchased quantities are recorded on storage records.
Required: Identify the weakness/weaknesses in internal control and opposite the identified weakness
or weaknesses, enumerate the control procedure/s that you will recommend to avoid or mitigate the risk of loss.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Kwame's company creates estimates for customers interested in home repair work. When the company is hired and performs work for a customer, how does Kwame generate invoices in QuickBooks? Select an answer: Change the type of information from Estimate to Invoice on the Estimate screen. Enter the job type in Product/Service and then select Create Invoice on the Estimate screen. Select Create Invoice on the Estimate screen.
The following events occurred over the course of a year at Coronado Corp., which uses a job order costing system: 1. Direct materials purchases totaled $586,000. Coronado Corp tracks its direct materials separately from its indirect materials. Purchases were made on account. 2. $133,000 of indirect materials were used in production. Coronado uses a separate Supplies Inventory account for indirect materials. 3. $556,000 of direct materials were used in production. 4. The direct labor payroll was $791,000 (credit Wages Payable). 5. Other manufacturing overhead costs incurred during the year totaled $684,000. 6. Coronado applies overhead based on a predetermined overhead rate of $24 per machine hour. The company used 48,000 machine hours during the year. 7. During the year, Coronado transferred goods costing $2,430,000 into the Finished Goods Inventory account. 8. Coronado sold products with a manufacturing cost of $2,398,000 to customers during the year.
You are the audit senior assigned to the audit of Fix-IT Ltd, a motor vehicle spares company.You obtain an understanding of the warehouse function within the revenue and receipts cycle at Fix-IT Ltd.The warehouse clerk accesses the internal sales order file with all the internal sales orders arranged by order numbers. They will then select the sales order for picking. Identify the type of access that the warehouse clerk should have to the internal sales order file. a. A. Read-only access b. B. Write-only access. C. D. Both write and read access d. C. No access
Miss Maria has recently joined the accounting department of SISHGC Limited as an assistant accountant. During her first meeting with the accounting department, the head of the department has elaborated her the responsibilities related to the general ledger and subsidiary ledger. Miss Maria uses the source documents such as purchase orders, sales invoices, and suppliers’ invoices to prepare journal vouchers for general ledger entries. At the end of each working day, she posts the journal vouchers to the general ledger and the related subsidiary ledgers. At the end of each month, Miss Maria reconciles the subsidiary accounts to their control accounts in the general ledger to ensure that there is no difference in these accounts. Required: Discuss the internal control weaknesses and risks associated with the above process.
Draw the flow chart for the following - manual based(NOTE: add files, data store and departments which all time should be included even not in the following process, also don’t add any more process not in the scenario , your drawing should be clear )The Process: Vendors send invoices to the AP department where they are reviewed and approved for payment. Once approved, the invoice and a cash disbursement voucher are sent to the cash disbursement department, where a check is prepared and sent to the vendor. A copy of the check, the invoice, and the voucher are returned to the AP department and filed.
Using the flowchart structure presented in Figure 2- in the text, prepare a system flowchart of the pro- cess outlined in Problem 3. Assume the following: Hard-copy timesheets are submitted by employees to department management. Managers submit the time sheet data digitally from their department terminals to the automated payroll application located in the data center. The automated system posts the transactions to the digital payroll file. The system also prepares and distributes hard- copy checks and cost center reports to employees and management respectively. Managers review the reports and file them in their departments
Mementos Academy is assessing whether to outsource its student enrolment processes. The general process followed by staff in the enrolment office is to first validate students’ prior academic record (e.g., secondary school results) and send an offer of enrolment, provide degree advice and enter students’ study program details into the student record system, and collect fees. The following table shows the costs associated with these three processes: Cost Validation Student records Fees collection Staff salaries 70,400 43,900 39,700 Data processing 9,200 32,500 7,900 Telephone 1,700 4,600 3,000 Postage - 1,500 4,000 Consumables 3,700 45,900 11,800 Electricity 1,600 3,100 3,000 Equipment depreciation 12,200 35,800 31,900 Insurance…
Carosel Limited is a specialty motor vehicle parts supplier, procuring parts from a large number of suppliers. As part of the interim audit work four weeks prior to the company year’s end, you are testing the procurement/purchases systems, attending the inventory count and examining the sales and cash receipts. Purchasing/Procurement System  When the quantity of a specific part falls below re-order level, an e-mail is sent to the procurement department detailing the part required and the quantity to order. Parts inventory is monitored by the store’s manager with a copy of the e-mail filed on the store manager's computer.  Procurement department staff check the e-mail, allocate the order to an authorised supplier and send the order to that supplier using Electronic Data Interchange (EDI). The order is identified by a unique order number with a copy of the EDI order filed in the order database by the computer system.  When goods are received at Carosel, the stores clerk confirms that…
Ngai Nhung is the sales manager at Hung Technologies. At lunch with the company CEO, Ngai proudly announced that he had received a __ from a client. The client had just requested a large quantity of components from Hung. A. purchase order B. purchase requisition C. back order D. voucher E. bill of lading
Marketing system provides some useful insights regarding the sales order. Different departments use this information. For instance, the production process uses this information to forecast the expected sale for next month. The production clerk uses this to create an online production schedule. From this schedule, the system automatically prepares weekly online work orders to be used by the production department. The production supervisor assesses the work orders from his terminal and prepares the necessary paper-based move tickets and materials requisitions. Then, the move tickets and two copies of the materials requisitions are distributed to each work centre. Later, work centre employees submit the two copies of the materials requisitions to the warehouse in exchange for materials and sub-assemblies. If additional new materials are needed beyond the standard quantity, the supervisor issues additional materials requisitions. Work centre employees record their work hours on paper-based…
Smith Manufacturing Company allows employees to purchase materials, such as metal and limber, for personal use at a price equal to the company's cost. To purchase materials, an employee must complete a materials requisition form, which must then be approved by the employee's immediate supervisor. Brian, an assistant cost accountant, then charges the employee an amount based on Smith's net purchase cost. Brian is in the process of replacing a deck on his home and has requisitioned lumbar for personal use, which has been approved in accordance with company policy. In computing the cost of the lumber, Brian reviewed all the purchase invoices for the past year. He then used the lowest price to compute the amount due to the company for the lumber. The Institute of Management Accountants (IMA) is the professional organization for managerial accountants. The IMA has established four principles of ethical conduct for its members: Honesty Fairness Objectivity Responsibility These…
Carosel Limited is a specialty motor vehicle parts supplier, procuring parts from a large number of suppliers. As part of the interim audit work four weeks prior to the company year’s end, you are testing the procurement/purchases systems, attending the inventory count and examining the sales and cash receipts. Purchasing/Procurement System  When the quantity of a specific part falls below re-order level, an e-mail is sent to the procurement department detailing the part required and the quantity to order. Parts inventory is monitored by the store’s manager with a copy of the e-mail filed on the store manager's computer.  Procurement department staff check the e-mail, allocate the order to an authorised supplier and send the order to that supplier using Electronic Data Interchange (EDI). The order is identified by a unique order number with a copy of the EDI order filed in the order database by the computer system.  When goods are received at Carosel, the stores clerk confirms that…