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  • Internal Control Weaknesses

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    Harold K
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    The document outlines several internal control weaknesses in a company's expenditure cycle and provides recommendations to address them. Specifically, it notes that 1) there are no written documents for verbal purchase orders, 2) a lack of documentation in communications between departments could enable fraud, and 3) quantity differences are not properly documented between receiving and other departments. It recommends maintaining written documentation of all transactions, communications, and reconciliations between departments to strengthen controls and prevent issues.

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    INTERNAL CONTROL WEAKNESSES

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    The document outlines several internal control weaknesses in a company's expenditure cycle and provides recommendations to address them. Specifically, it notes that 1) there are no written documents for verbal purchase orders, 2) a lack of documentation in communications between departments could enable fraud, and 3) quantity differences are not properly documented between receiving and other departments. It recommends maintaining written documentation of all transactions, communications, and reconciliations between departments to strengthen controls and prevent issues.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    1 views1 page

    Internal Control Weaknesses

    Uploaded by

    Harold K
    The document outlines several internal control weaknesses in a company's expenditure cycle and provides recommendations to address them. Specifically, it notes that 1) there are no written documents for verbal purchase orders, 2) a lack of documentation in communications between departments could enable fraud, and 3) quantity differences are not properly documented between receiving and other departments. It recommends maintaining written documentation of all transactions, communications, and reconciliations between departments to strengthen controls and prevent issues.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    INTERNAL CONTROL WEAKNESSES RECOMMENDATION

    1. The buyer looked for a supplier All transactions happening inside or outside
    through catalogs and also requested an the company should be recorded as much as
    order verbally. This is a problem for possible on written documents. This would
    there are no written documents that serve as an evidence or proof to give solution
    would prove that a purchase has been if ever there are problems occurred in the past
    made. transactions.
    2. It is not enough that the departments As much as possible, keep the communication
    are only communicating with each recorded as well as the documents involved.
    other without documentary report This would lessen the chance of fraudulent
    involved. This might result to a fraud behavior of the employees.
    especially when there are
    misunderstanding between the
    employees.
    3. When the receiving department are The department should make an actual
    only using red link to note the reconciliation to show the inconsistency of
    difference between the quantity the physical quantities. They should improve
    ordered and the quantity received. It their internal control so that the other
    might be difficult for the other department would see the problems of the
    department to know quantity orders easily.
    differences as there are no proper
    documents to show the inconsistency.
    4. There is a lack of segregation of duties Each department should have a proper
    especially in treasury department. This segregation of duties. In order for them to
    might cause a conflict especially when work effectively which can also save time.
    problems occurred, there are no
    specific person to blame.
    5. Inadequate records and documentation Each department should produce a proper file
    in all department. This might cause and keep all the records of the transactions.
    trouble as all the transactions should This would help them segregate the important
    have recorded documents. files to unimportant files.
    6. Insufficient control on the treasury They should have a proper checking of the
    department. This might cause some signatures and must work separately to ensure
    issues as the cashier is also doing the accuracy of the signatures.
    another work aside from maintaining
    the machine.
    Ho, Gleiza Mae C.
    BSA23
    Enabling Assessment – Expenditure Cycle

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