Weakness in internal control of procedure for purchase, Accounting Basics

You have been engaged internal auditor by the management of Alden proprietary limited to review its internal control over the purchases, receipt, storage and issue of raw material. You have prepared the following comments which describe Alden's procedure:

1. They are no perpetual records; hence the store room clerks do not keep records of goods received or issued. To compensate for the perpetual records, a physical inventory count is taken monthly by storeroom clerks who are well supervised. Appropriate procedures are followed in making the inventory counts.

2. When ordered material arrives at Alden, they are received by store room clerks. The clerks count the merchandise and agree the counts to supplier's delivery docket. All suppliers' delivery dockets are initialled, dated and filled in the store room to serve as receiving report.

Required:

Describe the weakness in internal control and recommended improvements of Alden's procedure for the purchase, receipt, storage and issues raw material. Organise your answer with following headings:

Weakness, recommended improvement.

Posted Date: 3/1/2013 6:22:19 AM | Location : United States







Related Discussions:- Weakness in internal control of procedure for purchase, Assignment Help, Ask Question on Weakness in internal control of procedure for purchase, Get Answer, Expert's Help, Weakness in internal control of procedure for purchase Discussions

Write discussion on Weakness in internal control of procedure for purchase
Your posts are moderated
Related Questions
#quthe books of deven verma could not be tallied.the accountant transferred the difference of Rs.1270 in the suspense account on the debit side the following mistakes were found la

You should have recorded in your cash books all amounts you've really received and payments you've really made. Though the cash books may be incomplete as your bank may have put ex

If Alisha Maintenance manufacturing has:  total maintenance cost of $2,785,000  total fixed maintenance cost of $310,000  total variable maintenance cost of $2,475,000  total m

Explain any two concepts of accounting with examples

Debtors are the major role of the business. He is the whole back bone of the business. The goodwill of the concern is in the hands of debtors because he is the person who takes our

How do your calculated stock prices compare to the company's present stock prices?   What do you think is causing them to deviate? This will need you to investigate a lit

Assorted fund, a U.K.-based globally diversified equity mutual fund, is considering adding Talisman Energy Inc. (Toronto Stock Exchange: TLM) to its portfolio. Talisman is an indep

Why to and by using in journal, trading a/c, p&l a/c and ledger?


Q. Qualitative characteristics of financial reporting? Accounting information must possess qualitative characteristics to be useful in decision making. This criterion is hard t