The partner in charge of the audit of Sinfin Wholesale Ltd is concerned about the controls in the company’s computerised purchases system. In the purchases system, invoices and credit notes are posted to the computerised purchase ledger by the purchasing department, and the computer automatically raises the cheque when the invoice is due for payment.

For cheque payments:

• under £1,000 — pre-printed cheques are used. No further authorisation of the cheque is required, as the authorised signature is included in the printing;

• between £1,000 and £10,000 — an authorised person must initial the cheque; and

• over £10,000 - an authorised person must sign the cheque.

Required

Describe controls which should be in place to ensure that:

(a) only authorised supplier invoices and credit notes are correctly posted to the purchases ledger;

(b) there are adequate controls over cheque payments.