The Finance Department of ABC Ltd collects data generated by the various departments and business units within the organisation, analyses it and then generates reports that are disseminated across the organisation. Most of this data is transmitted electronically and all operational staff within this department have access to the complete suite of information passing through their accounting system. The generated reports are distributed via email to authorised recipients. However, there is a common practice across the organisation of sharing passwords to access other individuals email accounts and information for timely resolution to problems. The accounting system has a number of inbuilt safeguards to ensure that the right type of information is being entered in the right place. Unfortunately, these controls are routinely overridden by both operational and management staff. The senior accountant, Phil Brown, is responsible for preparing, authorising and effecting all cash payments. This responsibility extends to supplier, payroll, petty cash and all other miscellaneous payments. Phil has put in place a system that matches documentation from all components of the purchasing process (purchase order, proof of delivery and supplier invoice), which is the prerequisite for any payment being authorised. A number of anomalies in the records have been identified, such as a suppliers name also appearing in the customer list of names, as well as Phils signature appearing on a number of receiving reports for purchased goods (a role that would normally be undertaken by the warehouse staff that received the shipment).

Required:

Identify four (4) lapses in the Finance Departments control environment and explain the risks that each lapse presents. Suggest a specific control that the Finance Department might introduce to address each lapse