Sampin & Songket Enterprise (SSE) is a retail outlet for exclusively designed traditional Malay clothing, in Alor Setar. Its primary business is selling a variety of Raya selections including ready-to-wear Baju Melayu, Baju Kurung, blouse, shawls and many selections for men, women and kids. SSE rented two shop lots next to each other. One for the sales outlet and the other is for the storeroom. Both shop lots were installed with high definition CCTV camera. Furthermore, SSE also employs a security guard to secure its premises at night.
SSE is using a legacy accounting system that employs a combination of manual procedures supported by stand-alone computers in various departments. All staff are equipped with a desktop computer that is protected with the staff’s own login and password. The following paragraphs describe expenditures system procedures of SSE.
Purchasing Procedures
The process starts when the inventory control clerk checks the inventory subsidiary ledger in his/her computer every day. This routine procedure intends to identify inventory items that need to be replenished. Once the item/s has/have been identified, the clerk sends an email to the purchasing clerk in the purchasing department requesting for a purchase order. SSE does not have an official email for its staffs, therefore all staffs use their personal email instead. For urgent items, the clerk makes a phone call to purchasing clerk informing of the requested items, otherwise, no such action is needed.
In the purchasing department, the purchasing clerk occasionally checks email requesting a purchase order. Only for urgent request via phone call, the clerk immediately checks email. The clerk notes down all details provided in the email including item code, description and quantity before proceeds with preparing a purchase order. Next, the clerk selects a supplier from supplier records in the computer. The clerk then keys in the details of the requested items together with the supplier’s information and prints three copies of the purchase order. The first copy of the purchase order is sent to the supplier. The second copy of the purchase order is sent to the receiving department to notify them of incoming delivery by the supplier. Last copy of the purchase order is filed in purchase order file by the supplier's name.
In the receiving department, the receiving clerk temporarily files the purchase order until ordered inventory items arrive. When the goods arrive in the receiving department, the clerk inspects them and reconciles the items against the information in the purchase order and the packing slip. The clerk then manually prepares four hard copies of the receiving report. The first copy of the receiving report together with the goods is sent to the storeroom. The second copy of the receiving report is sent to the accounts payable department. The third copy of the receiving report is forwarded to the inventory control department. A fourth copy of the receiving report together with the packing slip and purchase order are filed in an inventory received file chronologically.
In the storeroom, the storekeeper shelves the goods and updates the inventory subsidiary ledger in the computer. The storekeeper then files the receiving report in the department. In the inventory control department, after obtaining the receiving report from the receiving department, the clerk updates the inventory control account in General Ledger and files the receiving report in a receiving report file.
In the accounts payable department, the accounts payable clerk temporarily files the receiving report from the receiving department. Upon receiving the invoice from the supplier, the clerk takes out the receiving report to match against the invoice. Then, the clerk uses the invoice to update the purchases journal, the Accounts Payable subsidiary ledger and the Accounts Payable control account in General Ledger. The clerk then files the receiving report and the supplier's invoice in the department.

Cash Disbursement Procedures
The accounts payable clerk in the accounts payable department reviews the Accounts Payable subsidiary ledger in the computer to determine the liabilities that are due. Accordingly, the clerk prepares the payment voucher with a sequence numbering for each item due for payment. The clerk then prints a hard-copy of the payment voucher. Next, the clerk takes checkbook from a locked cabinet and prepares a check for the payment voucher. The clerk then sends them to the manager for approval and signature. The signed check is mailed to the corresponding supplier. The approved payment voucher is then filed together with the respective receiving report and supplier's invoice. Finally, the clerk updates the payment in the Accounts Payable subsidiary ledger and the Accounts Payable control account in General Ledger.

REQUIRED:

Assess at least THREE (3) possible strengths of internal control procedures that are present in the Sampin & Songket Enterprise’s purchase and cash disbursement system. Justify each of the strengths identified.