Long, CPA, has been engaged to examine and report on the financial statements of Maylou Corporation. During the review phase of the study of Maylou's system of internal accounting control over purchases, Long was given the document flowchart for purchases.

Required:

a. Identify the procedures, relating to purchase requisitions and purchase orders, that Long would expect to find if Maylou's system of internal accounting control over purchases is effective. For example, purchase orders are prepared only after giving proper consideration to the time to order, and quantity to order. Do not comment on the effectiveness of the flow of documents as presented in the flowchart or on separation of duties.

b. What are the factors to consider in determining 1. The time to order?

2. The quantity to order?