Control Plans
A. Reconcile bank account
B. Match invoice, PO, and receipt
C. Tickler file of open POs and receiving reports
D. Batch sequence check
E. Procedures for rejected inputs
F. Independent authorization to make payment
The following are 10 system failures that have control implications.

System Failures
1. Pownal Company was sent an invoice for goods that were never received. The invoice was paid in full.
2. Dewey, Inc. has several vendors who do not send invoices in a timely manner. Terms for payment are based on dates that goods are received, and discounts are being lost due to the late receipt, entry, and payment of these invoices.
3. Washington Company processes invoices in batches. The accounts payable program performs a three-way match of the invoice with the PO and receiving report. Those that match are recorded on the accounts payable master data. Those that do not match are printed on an exception and summary report. Some of these invoices are legitimate but are never recorded.
4. Betty Saunders, the cashier at Southwick Company, has been writing small checks to herself for many months. No one has noticed.
5. On a weekly basis, Pete, the cash disbursements clerk at Dalton Company prepares a batch of payments, including some to himself and sends the batch to the treasurer for approval. Pete has worked out a deal with Sue, who works in the treasurer’s office, to approve these batches, and they split these fraudulent payments.

Match the five system failures with a control plan that would best prevent the system failure from occurring. Also, give a brief (one or two sentences) explanation of your choice. A letter should be used only once, with one letter left over.

  • CreatedDecember 15, 2014
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