Case Study 4 - Inventory - Part III Refer to Case Study 3. The new manager of the inventory storeroom has been terminated and all problems have been remedied. You conduct another audit of inventory 6 months later - you will be dealing with a third manager in a time period of one year. Unfortunately, you discover the following problems:

1) There are no physical safeguards against theft and fire.

2) Inventory requisitions are not used

3) There is no control over intra-company transfers.

4) Purchase orders are not used.

5) The manager of the inventory storeroom handles all purchases.

Describe the ethical and financial problems that exist. What are your recommendations?