You have recently been appointed Systems Accountant at BHJ Ltd, a small electrical accessories company.

Your main brief is to design a company-wide computer purchasing system. To date the company has maintained a semi-manual record system for all its purchases.

For the previous five financial years the company has made average annual purchases of £15m (all purchases are from UK suppliers) and average annual profits of approximately £9m. The company has 47 employees working at seven locations throughout the UK: York, Hull, Birmingham, Oxford, Swindon, Bristol and Portsmouth.

For the year ended 31 March 2007, approximately 95% of the company’s purchases were on credit. The company is currently reviewing its purchasing system and is considering introducing a fully computerised purchasing system with the possibility of a web-based purchasing protocol linked to selected suppliers.

Required Making whatever assumptions you consider necessary, prepare a draft report for the management board of BHJ Ltd, detailing the following:

n the control objectives of a company purchasing system.

n the general controls and application controls you would expect to find in a computerised purchasing system, and n the control issues relevant to a web-based purchasing system.