The Expenditure Cycle Part I: Purchases and Cash

Disbursements Procedures

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The Conceptual System

OVERVIEW OF PURCHASES AND CASH DISBURSEMENTS

ACTIVITIES

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Purchases Processing Procedures


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MONITOR INVENTORY RECORDS

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THE CASH DISBURSEMENTS SYSTEMS

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EXPENDITURE CYCLE CONTROLS

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Transaction Authorization

PURCHASES SUB SYSTEM

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Segregation of Duties

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SEGREGATION OF THE GENERAL LEDGER AND ACCOUNTS
PAYABLE FROM CASH DISBURSEMENTS

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INSPECTION OF ASSETS

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THEFT OF ASSETS
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Access Controls

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INDEPENDENT VERIFICATION BY THE GENERAL LEDGER
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Inventory Control

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Purchasing Department

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THECASHDISBURSEMENTSSYSTEMS

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Concluding Remarks

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Computer-Based Purchases and Cash Disbursements
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AUTOMATING PURCHASES PROCEDURES USING BATCH
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Accounts Payable Department

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REENGINEERING THE PURCHASES / CASHDISBURSEMENTS

SYSTEM

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CONTROL IMPLICATIONS

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 The Automated System

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BETTER CASH MANAGEMENT

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 TIME LAG

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PURCHASING BOTTLENECK

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EXCESSIVE PAPER DOCUMENTS

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SEGREGATION OF DUTIES

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ACCOUNTING RECORDS AND ACCESS CONTROLS


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 Summary

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