Texans Products manufactures tomobile parts for teste parts stores throughout the country, One of the responsibilities of Texans internal dit staff is the review of internal control over the manufacturing equipment used in productie alto recommendations for improving the controls where necessary. The intemal audit stuff has just performed is les review and has obtained the stached information REQUIRED: Identify those was in which you believe the internal undit staff should make recommendations to management for improvement in the internal control structure relating to the purchasing and accounting for manufacturing equipment. Format your answer in the following manner TEXANS PRODUCTS INTERNAL AUDIT RECOMMENDATIONS FOR IMPROVEMENT OF INTERNAL CONTROL STRUCTURE RELATING TO THE PURCHASE AND ACCOUNTING FOR MANUFACTURING EQUIPMENT Weakness in Internal Control Recommendation For Improvement TEXANS PRODUCTS INFORMATION OBTAINED FROM LATEST INTERNAL AUDIT REVIEW () Purchase requisitions for manufacturing pent are supposed to be initiated by the production supervisor for the department needing the equipment. They are then to be discussed with the plant manager who is the request is reasonable and there is money available in the budget to purchase them this determination is positive, the purchase requisition is shitted to the Purchasing Department Upon receipt of the purchase requisiti formadacturing equipment. The Purchasing Department manager consults his list of vendos to find one who sells the type of equipment being requested. A purchase order is the prepared and sent to the vendor. When the quipment is received, it is sent immediately to the department that requested it and installed. This permits the productie department to obtain the earliest possible use of the equipment c) The control accounts in the general ledger for Property Plantand Equipment we supported by schedules prepared in the year of cand are filled in this manner by year) in a subsidiary file. These schedules are used to comporte depreciation on a composite basis for all assets by major class for that year. The company was standard rates, salvage values and depreciation methods for each mae class. These standards were established seven years ago when the company first startedish When manufacturing equipment is retired the plant manager orally notifies the accounting department so that they can make the appropriate entries in the accounting records te) There has been no reconciliation between the penal ledger control account for Property Plant, and Equipment and the subsidiary schedules for manufacturing equipment since the company bean operation. Also, nophysical entory of the manufacturing equipment has been taken and compared with the creeds for property, plant and equipment Texans Products manufactures automobile parts for sale to auto parts stores throughout the country. One of the responsibilities of Texan's internal audit staff is the review of internal control over the manufacturing equipment used in production and to make recommendations for improving the controls where necessary. The internal audit staff has just performed its latest review and has obtained the attached information. REQUIRED: Identify those areas in which you believe the internal audit staff should make recommendations to management for improvement in the internal control structure relating to the purchasing and accounting for manufacturing equipment. Format your answer in the following manner. TEXANS PRODUCTS INTERNAL AUDIT RECOMMENDATIONS FOR IMPROVEMENT OF INTERNAL CENTROL STRUCTURE RELATING TO THE PURCHASE AND ACCOUNTING FOR MANUFACTURING EQUIPMENT Weakness in Internal Control Recommendation For Improvement TEXANS PRODUCTS INFORMATION OBTAINED FROM LATEST INTERNAL AUDIT REVIEW (a) Purchase requisitions for manufacturing equipment are supposed to be initiated by the production supervisor for the department needing the equipment. They are then to be discussed with the plant manager who determines if the request is reasonable and there is money available in the budget to purchase them. If this determination is positive, the purchase requisition is submitted to the Purchasing Department. (b) Upon receipt of the purchase requisition for manufacturing equipment, the Purchasing Department manager consults his list of vendors to find one who sells the type of equipment being requested. A purchase order is then prepared and sent to the vendor. When the equipment is received, it is sent immediately to the department that requested it and installed. This permits the production department to obtain the earliest possible use of the equipment (c) The control accounts in the general ledger for Property, Plant, and Equipment are supported by schedules prepared in the year of acquisition, and are filed in this manner (by year) in a subsidiary file. These schedules are used to compute depreciation on a composite basis for all assets by major class for that year. The company uses standard rates, salvage values, and depreciation methods for each major class of asset. These standards were established seven years ago when the company first started in business. (d) When manufacturing equipment is retired, the plant manager orally notifies the accounting department so that they can make the appropriate entries in the accounting records. (e) There has been no reconciliation between the general ledger control account for Property, Plant, and Equipment and the subsidiary schedules for manufacturing equipment since the company began operations. Also, no physical inventory of the manufacturing equipment has been taken and compared with the accounting records for property, plant, and equipment