1.When Mr.

Clark orders materials for his machine-rebuilding plant, hesends a duplicate

purchase order to the receiving department. During the delivery of materials, Mr. Smith, the
receiving clerk, records the receiptof shipment on this purchase order. After recording, Mr.
Smith sends thepurchase order to the accounting department, where it is used to
recordmaterials purchased and accounts payable. The materials are transportedto the storage
area by forklifts. The purchased quantities are recorded onstorage records.
a.It was a mistake to send a duplicate copy of the P.O to the receivingdepartment, because the
employee will not thoroughly look andcount to be sure that all of the items arrived. The
employee will notcarefully look and count because he/she has the P.O. to their disposal. They
will just go by what is on that.
b. If there are more items shipped than there were on the P.O., there would be an increase of
theft, and inventory counts would be wrong.
c.If the receiving department were given a copy of the P.O. that didntlist the amount of the
items that were shipped, they would then have to check to see what arrived.
2.Every day hundreds of employees clock in using their employeeidentification cards at
Generous Motors Corporation. The data on thesetime records is used in the preparation of the
labor cost distributionrecords, the payroll journal, and the payroll checks and electronic
payments. The treasurer, Mrs. Webber, compares the payroll journal with the payroll records,
signs the checks, and returns the checks andpayroll notifications to Mr. Strode, the supervisor
of the computer department. The payroll checks and payment notices are distributed tothe
employees by Mr. Strode.
a.The payroll checks should have been given to someone independentof the department.
b. The supervisor couldve manipulated system, created fake names of employees, and cash
checks that were returned to him.