Fixed Assets ***Accounting Information System 10th Edition. James A. Hall***

Managers in the user areas submit requisitions for fixed assets to the purchasing department. When the purchasing department clerk receives the purchase requisition, she manually creates a purchase order and sends it to the vendor. The purchase requisition is filed in the purchasing department.

When the asset is shipped, the vendor sends the invoice to the AP department and delivers the asset directly to the user department, where it is reconciled to the packing slip and placed into service. The user then sends the packing slip to the fixed asset department.

Upon receipt of the invoice from the vendor, the AP clerk calculates a due date for payment and, using the department PC, records the liability in the AP subsidiary ledger. The clerk then files the invoice in the open AP file. Periodically, the clerk reviews the open AP file for items to be paid. When an accounts payable is due, the clerk accesses the department PC, prints a hard-copy cash disbursement voucher, and sends it to the cash disbursements department. The clerk then removes the liability from the digital AP subsidiary ledger. Finally, the clerk files the hard-copy invoice in the closed AP file.

Upon receipt of the cash disbursement voucher, the cash disbursements clerk accesses the department PC, prints a vendor check, and records the check in the digital check register. Next, the clerk sends the check to the vendor and sends the hard-copy cash disbursement voucher to the general ledger department.

When the fixed asset department clerk receives the packing slip from the user department, he accesses the department computer and records the asset in the fixed asset subsidiary ledger. Periodically, the clerk prepares an account summary that he sends to the general ledger. NOTE: The fixed asset department has additional procedures to manage the maintenance and disposal of fixed assets. These procedures are not part of this assignment.

The general ledger clerk receives the cash disbursement voucher from the cash disbursements department and the account summary from the fixed assets department. The general ledger clerk then accesses the department PC and posts to the cash, AP control, and fixed asset control accounts. Finally, the general ledger clerk files the voucher and account summary in the department.

Required

Describe the uncontrolled risks associated with these systems as they are currently designed.