Super Peter Rabbits Products Ltd (SPRP) is a large toy supplies company. SPRP has a separate purchasing and receiving department for its toys, baby products and games supplies. The toy department requisitions most purchases for the various toy stores and these purchases need to be approved by the department manager. Other departments are able to raise requisitions for the goods and services without authorisations. 

The purchasing department is responsible for obtaining goods and services as soon as the requisition is received with any supplier, using unnumbered purchase orders. For convenience, the purchase order book is accessible to all purchasing staff. When the goods are received, the warehouse clerks open the package and place the items on to the shelves.

 

Identify five internal control weaknesses and outline the risk that results from each weakness?

Suggest a way of improving the controls to overcome each weakness?

Answer rating: 100% (QA)

Lack of segregation of duties The fact that the purchase order book is accessible to all purchasing staff creates a risk that employees could create false purchase orders and subsequently approve them ... View the full answer