Probelm 9-13: You have been hired by the management of Alden, Inc.

to
review its control procedures for the purchase, receipt, storage, and
issuance of raw materials. You prepared the following comments, which
.describe Aldens procedures

Raw materials, which consist mainly of high-cost electronic components,

are kept in a locked storeroom. Storeroom personnel include a supervisor
and four clerks. All are well trained, competent, and adequately bonded.
Raw materials are removed from the storeroom only upon written or oral
.authorization from one of the production foremen

There are no perpetual inventory records; hence, the storeroom clerks do

not keep records of goods received or issued. To compensate for the lack
of perpetual records, a physical inventory count is taken monthly by the
.storeroom clerks, who are well supervised

.Appropriate procedures are followed in making the inventory count

After the physical count, the storeroom supervisor matches quantities

counted against a predetermined reorder level. If the count for a given
part is below the reorder level, the supervisor enters the part number on a
materials requisition list and sends this list to the accounts payable clerk.
The accounts payable clerk prepares a purchase order for a predetermined
reorder quantity for each part and mails the purchase order to the vendor
.from whom the part was last purchased

When ordered materials arrive at Alden, they are received by the

storeroom clerks. The clerks count the merchandise and see that the
counts agree with the shippers bill of lading. All vendors bills of lading are
.initialed, dated, and filed in the storeroom to serve as receiving reports

.Required: a. List the internal control weaknesses in Aldens procedures

.b. For each weakness that you identified, recommend an improvement(s)