Raptor Industries Co (Raptor) manufactures engineering parts. It has one operating site and a customer base spread across North America. Below is a description of the purchasing and payments system.

Purchasing system

Whenever production materials are required, the relevant department sends a requisition form to the ordering department. An order clerk raises a purchase order and contacts a number of suppliers to see which can despatch the goods first. This supplier is then chosen. The order clerk sends out the purchase order. This is not sequentially numbered and only orders above $5,000 require authorisation.

Purchase invoices are input daily by the purchase ledger clerk, who has been in the role for many years and, as an experienced team member, he does not apply any application controls over the input process. Every week the purchase day book automatically updates the purchase ledger, the purchase ledger is then posted manually to the general ledger by the purchase ledger clerk.

Payments system

Fox maintains a current account and a number of saving (deposit) accounts. The current account is reconciled weekly but the saving (deposit) accounts are only reconciled every two months. In order to maximise their cash and bank balance, Fox has a policy of delaying payments to all suppliers for as long as possible. Suppliers are paid by a bank transfer. The finance director is given the total amount of the payments list, which he authorises and then processes the bank payments.

Required:

1. You are an internal auditor of Raptor Industries Co. Your manager has asked you to perform an IT audit of the Purchasing system.

1. Identify and explain FOUR application controls that should be adopted by Raptor Industries Co to ensure the completeness and/or accuracy of the input of purchase invoices. (1 mark each to a total of 4 marks)
2. Explain what the control objective(s) the application control could help to meet, that is, completeness and/or accuracy. (( mark each to a total of 2 marks)

Use the following table format for your answer:

Identify and explain FOUR application controls that should be adopted by Raptor Industries Co to ensure the completeness and accuracy of the input of purchase invoices. (1 mark each)	Explain what the control objective(s) the application control could help to meet, that is, completeness and/or accuracy. ( mark each)

Your audit manager asks you to audit the Payments System. Provide four (4) substantive procedures over bank and cash balance of Raptor Industries Co.