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
what is accounting

A baker makes 500 cream-filled eclairs at a cost of $0.72 each. He estimates that 10% of the eclairs will be sold the following day at a reduced price of $0.80 each. Find the mar

A few account balances remain the same because no adjustments have affected them. For illustration the balance in Accounts Payable doesn't change and is simply extended to the Adju

At the end of 2011 Samuda reported a balance in Account receivable of $620,000 and estimated that $12,400 of this account would likely be uncollectible. The allowance for doubtful

What is the implication of applying accounting concepts wrongly?

Forms of business organizations Accountants habitually refer to a business organization as an accounting entity or a business entity. A business entity is some business organiz

Given this information: Lead-time demand = 600 pounds Standard deviation of lead-time demand = 52 pounds (Assume normality.) Acceptable stockout risk during lead time = 4

Though the results of the operations of an exact enterprise can be termed as precisely only after the business has ceased to control, its assets have been sold off and responsibili

Meranda Corporation purchases a machine for $125,000. It has an estimated salvage value of $10,000 an is expected to produce 50,000 units in its lifetime. During the first year of

On January 1, 2012, Bartell Company sold its idle plant facility to Cooper Inc. for $1,050000. On this date, the plant had a depreciated cost of $735,000. Cooper paid $150,000 ca