The systems flowchart presented in Figure 11-12 and the following description summarize ConSport Corporations cash disbursements system:
Question:
The systems flowchart presented in Figure 11-12 and the following description summarize ConSport Corporation’s cash disbursements system:
a. The accounts payable department approves all invoices for payment by match¬ ing them with the related purchase requisitions, purchase orders, and receiving reports. The accounts payable clerks focus on matching the supplier names on all documents and skim the remaining information.
b. The supplier file is searched daily for the disbursement vouchers of invoices due to be paid. Both copies of these vouchers are sent to the finance depart¬ ment, along with the other supporting documents. The cashier prepares and signs a check for each supplier and records the check in the check register.
c. The cashier receives the monthly bank statement with canceled checks and pre¬ pares the bank reconciliation. If an adjustment is required as a consequence of the bank reconciliation, a two-copy journal voucher is prepared. A copy of the bank reconciliation is sent to the internal audit department.
Required
a. Identify weaknesses in ConSport’s expenditure cycle, explain the resulting problem, and suggest a control procedure that would best prevent or detect and correct each weakness. Use the labels next to each step to reference your answer.
b. Describe how information technology can be used to improve the efficiency of ConSport’s accounts payable and cash disbursements processes. For each process you change, also explain how to use technology to provide strong internal controls.
Step by Step Answer:
