You have been assigned to review the controls around raw materials purchase cycle as a part of the audit of Bluth Corporation. During your fieldwork, you have observed the following:

Raw materials, which consist mainly of high$-$cost electronic components, are kept in a locked storeroom. Storeroom personnel includes a supervisor and four clerks. All are well trained, competent, and adequately bonded. Raw materials are removed from the storeroom upon oral authorization by a production supervisor.

No perpetual inventory records are maintained. Hence, storeroom clerks do not keep records for goods received or issued. To compensate the storeroom clerks perform a physical inventory count every $176$ days.

After the physical inventory count, the storeroom supervisor matches the quantities on hand against a predetermined reorder level. If the count is below the reorder level, the supervisor enters the part number on a materials requisition list that is sent to the accounts payable clerk. The accounts payable clerk prepares a purchase order for each item on the list and sends it to the supplier from whom the part was last purchased via email.

The storeroom clerks receive the ordered materials upon their arrival. The clerks count all items and verify that the counts agree with the quantities on the bill of lading. The bill of lading is then initialed, dated, and filed in the storeroom to serve as a receiving report.

All supplier invoices are routed to the accounts payable clerk for receipt, review, approval, and processing the payment. As a part of this process, the accounts payable clerk will contact the storeroom clerks and obtain a verbal confirmation that that quantity shown on the invoice is the same as shown on the receiving report. Next, the clerk will review the unit price against the last invoice from the same supplier for the same material. If all checks out, the accounts payable clerk approves the invoice for payment.

Each Friday, approved supplier invoices that are due within the next week are routed to the treasurer's department for payment. All $13$ individuals from the treasurer's department are authorized to disburse funds either by EFT or by printing a check.