CATEGORIES INTERNAL CONTROL
WEAKNESSES
Transaction Authorization General authority is being
granted by one personnel
only, the purchasing agent,
which is not being validated
whether the transactions is in
accordance with
management’s objectives.
Segregation of Duties The specific duties of
purchasing agent and
accounts payable clerk are
being done from the
beginning of the transaction
up to the closing of open
purchase order, voucher
register, and updating cash
accounts and accounts
payable control.
Supervision Lack of supervision in terms
of achieving adequate
segregation of employees’
duties and insufficient
number of employees to
their own specified tasks.
Accounting Records Lack of sufficient accounting
records which is being
prepared only by one
individual in every audit trail
events.
Access Control Too much indirect access of
the purchasing agent and
accounts payable clerk in
keeping and updating the
records and documents of
every transaction.
Independent Verification Lack of having an
independent personnel who
will do the verification of
individuals performance and
RESPONSE
Such authorization must be
given to a designated vendor
only when such decisions of
replenishing and selecting
supplier will be in specified in
advance and no approvals is
being required.
The duty and responsibility of
such personnel’s must be
only on a specified given task,
a potential fraud might exist
when both custody of
inventory and record keeping
will be given to one
agent/clerk.
The firm might establish a
managerial span of control in
which supervision of several
employees will be given to
one supervisor so that
employees might be
competent enough and
honest on what they are
doing.
Maintains an audit trail in the
organization so that when
conducting day-to-day
operations all the
information needed will be
available when responding to
customer inquiries.
Segregating duties of who
must have an access and
process the records of every
transaction, also controlling
the uses of every documents.
Hire an independent
individual who will do the
assessment and verification
procedures such as reviewing
the integrity of what is being reports which summarizes
done in the transactions. the business activities.