You are recently employed as a business analyst at Bell Studio, an Adelaide-based wholesaler of art supplies. Bell Studio sources its inventories from manufacturers in Australia, China, Japan and New Zealand. The company has a centralised accounting system with networked terminals at different locations. Bell Studios expenditure cycle procedures are described as follow:

Purchases System

The process begins when the purchasing clerk checks the inventory subsidiary ledger at his/her computer terminal each morning. When the quantity of an item is deemed to be too low, the clerk selects a vendor from the valid vendor file and prepares a digital purchase order. The clerk prints two hard copies: one copy is sent to the vendor, and the other is filed in the purchasing department. Digital purchase order record is added to the purchase order file.

When the goods arrive in the receiving department, the receiving clerk inspects them and reconciles the items against the information in the digital purchase order and the packing slip. The clerk then manually prepares two hard copies of the receiving reports. One of these accompanies the goods to the inventory warehouse, where the clerks shelves the goods and updates the inventory subsidiary ledger from his/her computer terminal. The clerk then files the receiving report in the department. The other copy of the receiving report is sent to the accounts payable department, where theaccounts payable clerk files it until the suppliers invoice arrives. When the accounts payable clerk receives the invoice he pull the receiving report from the temporary file, prints a hard copy of the digital purchase order, and reconciles the three documents. At this time, the clerk updates the digital accounts payable subsidiary ledger, the accounts payable control account and the inventory control account in the general ledger from his terminal. The clerk then sends the invoice, receiving report, and the purchase order copy to the cash disbursement department.

Required:

• Description of internal control weakness in each system and risks associated with the

  identified weakness.

• I need a complete answer pls pls