Please review the processes in the EXPENDITURE cycle for internal control weaknesses. You encounter the following scenarios in the Expenditure Cycle

What are the Threats and controls for the following scenarios?

A. Purchases are made via telephone. Purchases are on credit-with the supplier extending the credit. Purchase order data are entered into the system by a clerk who inputs the supplier name, price, part number, and quantity into the system. The Purchasing clerk manually totals the order and the Purchase Order is generated. The clerk adds new vendors to the VMF as the need arises. P.O. are kept in a drawer in the office.

B. The clerk then sends a copy of the purchase order to the receiving department. Upon receipt of the purchase order, the receiving department inputs the information found on the packing slip and enters it into the system. The system then generates a receiving ticket. A copy of the receiving ticket is sent to accounts payable for reference. The parts are then loaded on a pallet and placed in the incoming goods (raw materials) warehouse by the clerk who received them.

Occasionally, the parts remain on the receiving dock until the next business day because of absent workers.

C. The accounts payable clerk enters the receiving data into the system along with the supplier invoice. The same clerk retrieves the P.O. from the office drawer and manually updates the Purchase Order. The clerk waits to receive the supplier invoice until performing the three way match. Upon approving the invoice for payment, the clerk files the documents in a folder, sorted by date. The clerk then send the approved invoice to the accounting department who generates the check. The signed check is returned to accounts payable for mailing.