ToyMania Ltd is a toy wholesaler that sources its inventory from various local manufacturers and importers. In recent years, the company's accounting and internal control systems have been neglected, leading to evident issues. You have been assigned by the financial controller to review the company's systems, starting with the acquisitions and payments cycle. ORDERING DEPARTMENT The ordering department at ToyMania consists of five order clerks and a chief order clerk, Emma Thompson. The toys sold by the company are categorized into five product categories: board games, arts and crafts, dolls, video games, and model vehicles. Each order clerk is responsible for purchasing inventory within their assigned product category. Emma Thompson oversees the monitoring and analysis of the toy market, collaborating with the sales department to determine which new toy lines should be procured. All of the company's applications are housed on a local area network. Access to the network requires employees to log in using their unique user IDs and passwords. The inventory master file is divided into the five product categories. Each morning, the order clerks access their respective category in the master file and assess the quantity on hand to decide whether an order needs to be placed. The inventory master file contains details of ToyMania's preferred supplier, and the order clerks usually place orders with them. However, if the preferred supplier is out of stock, the order clerks source the item from an alternative supplier. In such cases, the order clerks add the new supplier's details to the inventory master file. To generate a computerized purchase order, the order clerk enters a supplier code. The "create purchase order" module within the acquisitions software is accessible only to the order clerks. The order clerk fills in all the mandatory fields, including the supplier code, quantity, and description of the goods to be ordered. Once all the details are captured, a two-part sequenced purchase order is printed. The top copy is sent to the supplier, while the second copy is numerically filed in a lever arch file. Each order clerk has their own numerical sequence for purchase orders. To prevent duplicate orders, the order clerk updates the inventory master file by entering the date in the "pending order field." Page 7 of 8 RECEIVING OF GOODS DEPARTMENT Goods ordered by ToyMania are delivered in boxes that display the quantity and description of the contents on the outside. Each delivery is accompanied by a supplier delivery note, which lists the quantities and descriptions of the goods being delivered. The "Receiving Department" at ToyMania is a physically secure area connected to the warehouse. Any of the three receiving clerks can accept a delivery. To validate the order, the receiving clerk enters the purchase order number from the supplier delivery note into the computer terminal in the receiving department. The receiving clerk has read access to the Purchase Order file in the system. If the purchase order is valid, the screen displays the words "accept delivery." The receiving clerk verifies the number of boxes delivered, comparing it with the quantities and descriptions recorded on the boxes and the supplier delivery note. If discrepancies are identified, the receiving clerk amends the delivery note accordingly. Both the receiving clerk and the person delivering the goods sign both copies of the delivery note to acknowledge any changes made. Next, the receiving clerk accesses the "create goods received note" module, which is exclusively available to the receiving clerks. The screen displays a formatted goods received note, which the receiving clerk completes using the information from the supplier delivery notes. Once the goods received notes are finalized, the quantities in the inventory master file are automatically updated, and the "pending order field" date is deleted to indicate that the order has been received. The receiving clerk prints one copy of the goods received note, which is attached to the supplier delivery note and filed sequentially in the receiving department. The goods received notes remain in the system and can be accessed and printed by the creditors/accounting department for matching with the supplier invoice upon its arrival. The boxes received are securely stored until the warehouse packers have the necessary time to move them into the warehouse, unpack them, and place the toys on their respective shelves. 3.1 1 Identify the eight weaknesses that exist in these department functions. (8 marks) 3.2 Recommend eight (manual and/or automated) controls to be implemented in the system's functions: (8 marks) 3.3 Formulate four (4) tests of controls for the automated control in the system. (4 marks) 3.4 List the functions within the revenue and receipts cycles and those the of acquisition and payment cycle. (4 marks) 3.5 Describe the purpose of the following documents: (6 marks) Internal sales order Invoice Picking slip