The accounting department of a small company is responsible for payment of creditors. It receives a copy of each purchase order issued, a receiving document when the goods arrive, and the vendor's invoice. All documents are date-stamped upon receipt and filed securely. When the receiving document and vendor's invoice arrive, a clerk matches details and checks the accuracy of items and computations on the documents. A second clerk then prepares a disbursement voucher and a check for payment and gives the check, the voucher, and the supporting documents to a manager who examines them before signing the check.

Required. List the control objectives for these operations. Prepare a controls matrix (see Table 2-1) in which the columns show causes of loss and the rows show the controls in existence to reduce expected losses. The elements of the matrix should show which controls act on the causes of loss (use a tick mark to show which controls relate to a particular cause of loss). How well do the controls allow the control objectives to be accomplished? What controls are likely to change if the system is computerized?