Question
ABC Company is a newly established clothes retail shop at Selangor, Malaysia. The following narrative describes the office supplies purchasing process at ABC Company. When
ABC Company is a newly established clothes retail shop at Selangor, Malaysia. The following narrative describes the office supplies purchasing process at ABC Company.
When there is a need to order office supplies, administrative staff of the respective departments fill in a purchase requisition. A copy of the purchase requisition is then sent to each of the purchase and warehouse departments. The purchase department staff would then determine which approved vendors would be able to supply the office supplies. If there are more than one vendor that can supply the office supplies, the purchase department staff would then select the first vendor that appeared on the approved supplier list. The purchase department staff would send a purchase order to that vendor. For the internal control purpose, a copy of the purchase order is sent to the warehouse department.
When the office supplies are received by the warehouse department, a receiving report is prepared which records the quantity and quality of the goods received. The receiving report and the vendor invoice will be send to the accounts department. The accounts department staff will then compare the vendor invoice with the receiving report before payment is made to the supplier.
You are the newly appointed internal auditor for ABC. You have been asked to identify issues and propose recommendations to improve their purchasing business process.
Required:
Identify five (5) issues and for each of your issues recommend changes to improve the current office supplies purchasing process at ABC Company. Justify and explain your answers.
(35 marks)
Issue #1
Recommendation to address issue #1
Issue #2
Recommendation to address issue #2
Issue #3
Recommendation to address issue #3
Issue #4
Recommendation to address issue #4
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Issue #5
Recommendation to address issue #5
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