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In January 2023 SteelX Manufacturing Company purchased over $5 million worth of special equipment. The department heads are responsible for requisitioning materials and equipment if
In January 2023 SteelX Manufacturing Company purchased over $5 million worth of special equipment. The department heads are responsible for requisitioning materials and equipment if its within their departments budget. The companys ordering system functions as follows: A purchase requisition form is prepared and sent to the purchasing department. Upon receiving a purchase requisition, a purchasing agent verifies that the requester is a department head. The buyer next selects a supplier and then phones the supplier, requests a price quote, and places a verbal order. A purchase order is processed, with the original sent to the supplier. The receiving department gets a copy of each purchase order. When equipment is received, that copy of the purchase order is stamped with the date. The receiving clerk then forwards the stamped purchase order and equipment to the requisitioning department head and verbally notifies the purchasing department that the goods were received. Upon receipt of a purchase order, the accounts payable clerk files it in the open purchase order file. When a vendor invoice is received, it is matched with the applicable purchase order, and a payable is created. On the due date, a check is prepared and a payment is processed to the supplier. Checks for less than $10,000 are machine signed. However, both the cashier and the treasurer sign all checks over $10,000. Identify weaknesses relating to SteelX Manufacturing Companys existing expenditure cycle procedures, and suggest a solution for each weakness identified
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