Group Task

Required:
a. Describe the weaknesses of Diamond Manufacturing Company relating to
“special orders”.
1. Buyer does not verify that the department head’s request is within budget
2. Invoice quantity is not compared to receiving report quantity
3. Voucher package not cancelled when invoice paid
b. Recommend control procedures that must be added to overcome weaknesses identified
in part a.
1. Compare requested amounts to total budget and Year-to-Date (YTD)
expenditures
2. Invoice quantity received must be compared / verified with quantity received
3. Treasurer should mark voucher package as PAID when check is signed
c. Describe how the control procedures you recommended in part b should be modified
if Diamond reengineered its expenditure cycle activities to make maximum use of IT.
1. System can automatically compare the requested amount to the remaining
budget
2. A system would verify invoice quantity with quantity received
3. Configure system to mark supporting documents as used when invoice is paid