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Create a questionnaire checklist that will be used to determine controls for each of the basic activities in the expenditure cycle (ordering goods, approving supplier invoices, receiving, and cash disbursements).
Required
a. For every control issue, prepare a Yes/No question such that a "No" answer signifies a control weakness. For example, one question might be "Are supporting documents, such as purchase orders and receiving reports, marked ‘paid' when a check is issued to the vendor?"
b. For each Yes/No question, prepare a brief explanation of why a "No" answer represents a control weakness.
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One area of exacting concern is the inventory account, which has a year-end balance of $297,000. Discussions with the accountant reveal the subsequent.
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