Instructions: List (1-10) each B/AR/Cr Business Process Control Plans or Deficiencies. Match the Control plans listed. Include a brief at least two sentence explanation of your choices. The explanation should accompany your Control Plan choice.

The following is a list of 12 control plans from this chapter or from Chapters 8, 9, 10, & 11. This is followed by a list of 10 system failures that have control implications. Match the 10 system failures with a control plan that would best prevent the system failure from occurring. Also, give a brief (one- to two-sentence) explanation of your choice. A letter should be used only once, with two letters left over.

Control Plans

1. Compare PO data to input receipt data

2. Written code of conduct

3. Compare vendors for price, terms, quality, and availability

4. Monitor open POs

5. Independent authorization to record receipt

6. Count goods and compare to vendor packing slip

7. Independent vendor master data maintenance

8. Personnel management controls (supervision)

9. Perimeter and building controls

10. Segregate warehouse and receiving functions

11. Digital signature

12. Logical and physical access controls

System Failures

1. Warehouse managers at Broward, Inc. have been discovering inventory shortages. When they investigate the paperwork transferring the goods from receiving to the warehouse, the evidence indicates that the goods had arrived in the warehouse.

2. The accounts payable clerks at Grande Company have difficulty reconciling the quantities recorded as received and the quantities on vendor invoices. Usually, the vendors claim that they are billing for the amounts that they had shipped.

3. Carol, a buyer at Pilot Company, ordered unneeded inventory items from a vendor of which she is an owner.

4. Donald worked in the receiving department at Altos, Inc. One day, goods were received from Adams Company for which no open PO could be found. To get the items received, Donald figured out a way to create a PO. Later, it was discovered that the goods had never been ordered.

5. Katie, a buyer at Form, Inc. was in a hurry to buy a part needed to get the Form factory back in operation. She found Edgar Company, a local vendor that could supply the part that day but for a premium price. Because it was an emergency, she created a vendor record for Edgar and issued the PO. Subsequently, other buyers began to use Edgar for other purchases.

6. Steve, who works in the warehouse at Lakeshore, Inc. has gotten into some financial difficulties and has figured out a way to make some extra cash by working with the folks at Herman Company. He creates orders for purchases from Herman and records a receipt, but no goods are ever received. Subsequently Herman sends a bill to Lakeshore, which gets paid, and Steve gets paid 20 percent of the take.

7. At Walnut, Inc. there are often discrepancies between what is ordered and what is recorded as received. Discrepancies include wrong items and wrong quantities.

8. Sand Lake Company is often running out of inventory of certain key items. When research is conducted to find out the reason for the stock-outs, they find that a PO had been issued, but the goods had not yet been received. Typically, these delayed deliveries are consistently from the same vendors whose poor performance has been noted in the past.

9. Marina Company uses the Internet to send POs to its vendors. The vendors for Marina have been receiving POs that seem to be from Marina but are actually bogus.

10. The internal audits at Deltona Company have found several discrepancies in the inventory data; the inventory is on the shelf, but the records do not reflect those balances. When they investigate further, they find that the goods were received but never recorded.

List the System Failures (1-10) and match the control plan that would best prevent the system failure from occurring. You should also include an explanation for your choice which is at least two sentences.