Cuesta Foods is a wholesale food distributor located on the Central Coast.

It sells a variety of meat, frozen foods and grocery to foodservice organizations from Salinas to Camarillo. It is a privately owned corporation with a 30,000 square facility. It has 55 employees and virtually operates 24 hours a day, 6 days per week. The company generates approximately $30 million in annual sales and most sales are on credit.

Cuesta Foods used a distributed computerized ERP system and is considering an upgrade to a customized computer system designed by a local software company. The Company has hired your auditing firm to assess its operations and recommend improvements to its internal controls to reduce risk and improve the accounting system.

Cash Disbursements System

Matthew, the accounts payable clerk regularly checks the accounts payable subsidiary ledger account to ensure timely payment to vendors. She (accounts payable clerk) then approves the vendor payment and creates a check which uses an electronic signature that he controls for safekeeping. The check is mailed to the vendor and theaccounts payable clerk debits the vendors accounts payable ledger. The ERP system automatically updates theaffected general ledger accounts. The checks are sequentially numbered and stored in a locked room; the key is safeguarded by Matthew.

a. Create data flow diagrams of the current system

b. Create system flowcharts of the existing system