MARIO C. LORICO JR.

(517221)
ACC224 (6346): AIS

ASSIGNMENT WEEK 4-5

(NOTE: Hello Ma’am, I did not include the questions to avoid my
SafeAssign score to increase.)
1.
There are a lot of reasons why we need to segregate key functions in the
expenditure cycles and one of them is to improve the internal controls in the
expenditure cycle. It is normal for the company to consider this option simply
because there’s only so much a personnel or officers can handle, and once they
go beyond what they’re capable of doing and supervising, mishaps and
loopholes will surely be present, which can lead to all sorts of bad outcomes
such as errors and inaccuracy in the data that they’re providing out of their job.
In addition, segregating key functions in management provides a venue for
being able to provide limelight to a specific task, meaning the segregated task
will be tended with utmost care and effort, and the process of controlling and
evaluating it will be much easier since it has its own information from its data
processing operations.

2.
Based on what I’ve learned, the three documents the company needs for it to
pay the seller’s invoice are source documents composed of the purchase order,
receiving the report, and invoice itself, which is also known as Voucher
Package. Purchase order originates from purchasing department as it was made
by a purchasing agent, and it is backed by a purchase requisition slip from the
appropriate department that wants to order the item. Receiving report is a
document that originates from a receiving clerk who intercepts the delivery of
goods and the one who checks and verifies the items delivered carefully before
making such a document. Lastly, invoice or seller’s invoice that originates from
the seller signifying the corresponding liability and obligation the company
must pay for availing the seller’s goods and services. All these source
documents must be equal in amount to prove that the transaction is error-free.

3.
In my view, I think prenumbered documents helps to provide indirect access
control over assets in a way that the assets that are prenumbered are secured
since any type of inappropriate acts towards those assets will be quickly
checked and verified, thus making the entity have a much higher sense of
security and assurance that those assets will not be in a wrong place. Therefore,
prenumbered documents provide indirect access control over assets by being
able to quickly track them if such discrepancies arise in the records of the
assets.

4.
As businesses thrive to be successful, every part of their business processes is
always carefully and meticulously looked at to ensure that the business is going
the right path. Such as other business processes as well as business competent,
control in the receiving department is also very crucial for the business since it
is one of the direct veins of the life of the business as part of the value chain;
thus, supervising it and looking at it more carefully will reap benefits, while not
looking at it or monitoring it closely will also turn the benefits the other way
around. Simply, supervision controls in the receiving report provide a layer of
security for the assets of the company, making it a benefit; however, it is not all-
remedy for the business since errors and mistakes might still pop up.

On the other hand, the blind field on the receiving report, in my opinion, may
arise from two factors: human error and source error. Human error talks about
the fact that humans commit mistakes as they are not perfect machines, while
source error only pertains to the idea that though the human is careful, it doesn’t
erase the fact that the information human holds is error-free.