Subsystem: Requisitioning ( Re ) Control Objective: Accurately identifies needs manner Re-4-Does a department head review and approve requests for goods in relation to a budget or other form of management control? 1. Risk Assessment - If this control was weak, what could happen? 2. Explain the System/Control using a Flowchart - Compare to Sample or Draw Flowchart 3. Evaluate the maturity level of two components of the system (people, technology, control, process) 4. What type of control(s) and/or segregation of duties (approve, custody, record) 5. Evaluate the control based on the case scenario - Strong or weak, explain 6. How would you audit this control to assure that it had been in place over the last financial reporting period? 7. Identify at least two links to the coso framework Beth is a consultant hired by the CEO of Blair Fishing \& Camping Supply. This company orders and sells fishing and camping equipment to individuals. After talking to the accounting department, Beth has documented the following processes that currently occur at Blair: Blair has a separate Purchasing Department that issues POs for items. The purchasing department decides what to order based on sales projections. In addition, purchasing agents also orderitems at least every quarter to make sure they don't run out of stock. The purchasing employees only issue POs to vendors who are on the approved vendor list. The purchasing department sends a copy of the PO to the warehouse and to accounting. When the goods arrive in the warehouse, the receiving employees only receive the shipment if there is a PO for the goods. The receipt is logged onto a daily receiving report with a copy delivered to the accounting department. They then move the inventory to an area in the warehouse to get it out of their way. It is eventually moved to the warehouse shelves if someone in the company has extra time. Since Blair is a small company, any employee is able to go and check the inventory levels or talk to warehouse personnel if they have questions about inventory or reports. Once the vendor invoice is received, the accountant will match the PO to the daily receiving report and process the invoice in the accounting system. Vendor invoices are paid each Friday, and the inventory and A/P is posted on that date in the system. Checks are signed by the owner of the company. The vendor invoice is then stamped "paid" and filed in the vendor file. The bank reconciliation is done by anyone in the accounting department who has time. After further discussions with the accounting staff, they have mentioned that in the past the warehouse seems to have high levels of discontinued items. Upon further review, it appears that the purchasing department was not looking at the new products and discontinued products report from management. Beth also noticed that the accounting department has had to credit customers for poor quality products shipped to customers