Farmer Joe (Pty) Ltd manufactures various items of machinery for the agricultural sector. The company manufactures items such as irrigation pumps and small trailers, as required by its customers.

All raw materials and parts for manufacturing are held in the raw material and component store, a separate warehouse adjoining the factory, and are issued to production as required. Once manufactured, the items move from the factory to the finished goods warehouse, which adjoins the factory. Each warehouse is controlled by its own warehouse foreman.

After consultation with the farmer, the product development department designs the item required and draws up a "build schedule", which identifies every part required to manufacture the item. Build schedules are pre-printed and numerically sequenced.

Farmer Joe (Pty) Ltd has good internal controls including sound departmental division of duties within each cycle. The only function within the acquisitions cycle that is not computerised is ordering, which is still carried out manually.

REQUIRED : 4.1 Describe the internal controls that should be in place at Farmer Joe (Pty) Ltd in respect of

4.1.1 ordering of raw materials and parts for manufacturing; (11 Marks)

and 4.1.2 transfer of raw materials and parts from the raw material and component store to the factory. (10Marks)