ABC Limited has recently observed some growth in their sales. The company has managed its expenditure cycle activities through a paper and pencil-based system. In response to this rapid growth, the company decided to configure a new expenditure cycle using the basic technology. The head of the accountant is mainly concerned about the business activities of the following departments:

 

• Purchasing Department;
• Receiving Department; and 
• Account Payable Department. 
• These business activities are presented in Figure 2 below.
•   1- Based on the above information, discuss the uncontrolled risks associated with the system as currently configured? 

Describe the controls that need to be implemented into the system to mitigate the risks in the given scenario?

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Purchases Department Inventory Records Identity items and Select Vendor PO PO Vendor Packing Slip Receiving Department Packing Sip Prepare Receiving report Rod Repr Reconcile documents and set up Liability Rec Repr Invoice Account Payable Department Vendor Invoice Rec Repr Account Payable Chock Vendor On Due date Remove ability and Disburse cash Cash Disbursements Journal Purchases Department Inventory Records Identity items and Select Vendor PO PO Vendor Packing Slip Receiving Department Packing Sip Prepare Receiving report Rod Repr Reconcile documents and set up Liability Rec Repr Invoice Account Payable Department Vendor Invoice Rec Repr Account Payable Chock Vendor On Due date Remove ability and Disburse cash Cash Disbursements Journal