Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following are business process failures in the expenditure cycle for Scottsdale Pty Ltd (a manufacturer of wind turbine parts) that indicate weaknesses in control

image text in transcribed
The following are business process failures in the expenditure cycle for Scottsdale Pty Ltd (a manufacturer of wind turbine parts) that indicate weaknesses in control (Note: the term "vendor' below means 'creditor' or 'account payable'). a. c. e. A vendor invoice was posted to the wrong vendor record in the accounts payable master data because the data entry clerk transposed digits in the vendor identification number. b. Several scanned invoice documents were lost and did not get recorded. The amount of a cash payment was authorised by the cash payments clerk prior to the payments program being run and approved by the finance manager. d. The accounts payable clerk prepares a list of proposed payments that is based on due dates and vendor payment terms. Many of these payments are not approved by the cash payments clerk due to lack of funds. A vendor invoiced Scottsdale for goods that were never delivered. The invoice was paid at its full amount. f. The unit prices the vendor charged were in excess of those that had been negotiated. The invoice tendered by the vendor was paid. g. A vendor submitted an invoice in duplicate. The invoice got paid twice. h. Because of several miscellaneous errors occurring over a number of years, the total of the outstanding vendor payable balances shows a large discrepancy from the balance reflected in the general ledger. i. Several electronic invoices were misrouted to Scottsdale Pty Ltd (they were meant for another company). Unfortunately, Scottsdale Pty Ltd received, input and paid the invoices but in fact had never purchased anything from the vendor. j. Goods received from a certain vendor were always on time. However, the invoices from this vendor are often late or never received. As a result, Scottsdale Pty Ltd has lost significant amounts of money by failing to obtain cash discounts for prompt payment. Required For each of the business process failures described above, provide a description of a control that you believe would address the deficiency. Indicate in your answer whether your control is a preventive, detective or corrective control, or more than one of these. (Approximately three to four sentences are expected for each business process failure.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Studies Of Company Records (RLE Accounting)1830-1974

Authors: J. R. Edwards

1st Edition

1138983306, 9781138983304

More Books

Students also viewed these Accounting questions

Question

=+What is the expected value of purchasing a Thursday ticket?

Answered: 1 week ago