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For your initial discussion post, identify the internal control strengths in PEI s system, as described in the case study below. Find at least five
For your initial discussion post, identify the internal control strengths in PEIs system, as described in the case study below. Find at least five ways in which PEIs processes are exhibiting good internal control.
Please keep to the case study contents. Do not include things not mentioned. There is also an operational issue that is so glaring that it would never happen in the real world.
You will be graded on the following criteria:
Knowledge of strengths in internal control
Knowledge of segregation of duties authorization recording, custody
Case Study
Peyton Electronics, Inc PEI is a small wholesale discount supplier of electronic instruments and parts. PEIs competitive advantage is its deepdiscount, threeday delivery guarantee, which allows retailers to order materials often to minimize instore inventories. PEI processes its records with standalone, incompatible computer systems except for integrated enterprise resource planning ERP inventory and accounts receivable modules. PEI decided to finish integrating its operations with more ERP modules, but because of cash flow considerations, this needs to be accomplished on a stepbystep basis.
It was decided that the next function to be integrated should be sales order processing to enhance quick response to customer needs. PEI implemented and modified a commercially available software package to meet PEIs operations. In an effort to reduce the number of slowpaying or delinquent customers, PEI installed Webbased software that links to the Web site of a commercial credit rating agency to check customer credit at the time of purchase. The following are the new sales order processing system modules:
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