In 2013, Great Company purchased over $10 million of office equipment under its special ordering system, with individual orders ranging from $5,000 to $30,000. Special orders entail low-volume items that have been included in an authorized users budget. Department heads include in their annual budget requests the types of equipment and their estimated cost. The budget, which limits the types and dollar amounts of office equipment a department head can requisition, is approved at the beginning of the year by the board of directors. Department heads prepare a purchase requisition form for equipment and forward the requisition to the purchasing department. Greats special ordering systems functions as follows:

Purchasing On a receiving purchase requisition, one of five buyers verifies that the person requesting the equipment is a department head. The buyer that selects the appropriate vendor by searching the various vendor catalogs on file. The buyer then phones the vendor, requesting a price quotation, and gives the vendor a verbal order. A prenumbered purchase order is then processed, with the original sent to the vendor, a copy to department head, a copy to receiving, a copy to accounts payable, and a copy filed in the open requisition file. When the buyer is orally informed by the receiving department that item has been received, the buyer transfers the purchase order from the unfiled file to the filed file. Once a month the buyer reviews the unfiled file to follow up and expedite open orders.

Receiving The receiving department receives a copy of the purchase order. When equipment is received, the receiving clerk stamps the purchase order with the date received and, if applicable, in red pen prints any differences between quantity on the purchase order and quantity received. The receiving clerk forwards the stamped purchase order and equipment to the requisitioning department head and orally notifies the purchasing department.

Accounts Payable On receipt of purchase order, the accounts payable clerk files the purchase order in the open purchase order file. When a vendor invoice is received, the invoice is matched with the applicable purchase order, and a payable is set up by debiting the equipment account of the department requesting the items. Unpaid invoices are filed by due date, and at the due date a check is prepared. The invoice and purchase order are filed by purchase order number in a paid invoice file, and then the checks is forwarded to the treasurer for signature.

Treasurer Checks received daily from the accounts payable department are sorted in two groups: those over $10,000 and those of $10,000 and less. Checks for $10,000 or less are machine-signed. The cashier maintains the key and signature plate to the check-signing machine and maintains a record of use of the check-signing machine. All checks over $10,000 are signed by the treasurer or the controller.

Required: Describe the internal accounting control weaknesses relating to purchases and payments of special orders of Great Company for each of the following functions:

1. Purchasing (at least 2 weaknesses)

2. Receiving (at least 2 weaknesses)

3. Accounts payable (at least 2 weaknesses)

4. Treasurer (at least 2 weaknesses)