The inventory is mainly supplied by four local manufacturers. All the purchases are in charge by the purchasing executive, Ellen. She will negotiate the price with the suppliers and create purchase orders manually for the suppliers. The supplier will send the purchase invoice directly to Ellen and she will check and approve the purchase invoice for payment. She will pass the purchase invoice to the accounting clerk, Ros for recording into the accounting system, "AutoCount" and payment will be made when due. The cheque will be prepared by Ros and signed by either James, Tony, or Ms. Tong.

Required:

(a) Discuss ANY THREE (3) deficiencies and the implications that the above observations have for the purchasing and the payment system of JY Miko Sdn. Bhd. and recommend improvements to address the deficiencies in the existing internal control system.

The answer must follow the general guideline below:

1) Identify each of the Weakness/Deficiency

2) Explain the Reason (why) there is weakness & possible implication to the company (How the weakness affect the company profits/performance/structure)

3) Explain 2 of the Suggestion/Recommendation base on the control procedure for each of the weaknesses (Suggestion/Recommendation must link to the case study, can't write too general)

(b) Based on the answer above in (a), write an abstract to summarize the key points.

Answer rating: 100% (QA)

SOLUTION a 1 Deficiency 1 Manual purchase order creation Explanation The purchasing executive manually creates purchase orders for suppliers without any standard template or approval process This lack ... View the full answer