Match threats in the first column to appropriate control procedures in the second column. More than one control may be applicable.
Threat Control
1. Failing to take available purchase discounts for prompt payment.
2. Recording and posting errors in accounts payable.
3. Paying for items not received.
4. Kickbacks.
5. Theft of inventory.
6. Paying the same invoice twice.
7. Stockouts.
8. Purchasing items at inflated prices.
9. Misappropriation of cash.
10. Purchasing goods of inferior quality.
11. Wasted time and cost of returning unordered merchandise to suppliers.
12. Accidental loss of purchasing data.
13. Disclosure of sensitive supplier information (e.g., banking data).

a. Only accept deliveries for which an approved purchase order exists.
b. Document all transfers of inventory.
c. Restrict physical access to inventory.
d. File invoices by due date.
e. Maintain a cash budget.
f. Automated comparison of total change in cash to total changes in accounts payable.
g. Adopt a perpetual inventory system.
h. Require purchasing agents to disclose financial or personal interests in suppliers.
i. Require purchases to be made only from approved suppliers.
j. Restrict access to the supplier master data.
k. Restrict access to blank checks.
l. Only issue checks for a complete voucher package (receiving report, supplier invoice, and puchase order).
m. Cancel or mark “Paid” all supporting documents in a voucher package when a check is issued.
n. Regular backup of the expenditure cycle database.
o. Train employees how to respond properly to gifts or incentives offered by suppliers.
p. Hold purchasing managers responsible for costs of scrap and rework.
q. Reconciliation of bank account by someone other than the cashier.

  • CreatedDecember 19, 2014
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