Control Design Evaluation Instructions:

Based on the purchase order processing flowchart below, complete the short answer questions below (each question corresponds to a single row in the Control Design Evaluation matrix) For each answer, first write "Expected Control Activity": and then state the expected control activity. On a new row, "Control Design Evaluation:" and then your conclusion, I.e. "Design Appropriate' or Design Weakness" with a short explanation supporting your conclusion.

For Example: Expected Control Activity: Authorization of purchasing is separate from purchase processing.

Control Design Evaluation: Design Appropriate. Inventory control prepares purchase requisitions based on current inventory needs and purchasing later prepares the purchase order.

First Question:

Independent Verfication 1

State expected purchase order processing Independent Verfication control activity other than "The General ledger department reconciles the purchase voucher (from accounts payable) and the inventory summary (from inventory control) before updating the general ledger". Use the flowchart to make a conclusion about the design effectiveness and support this conclusion with a short explanation.

Second Question:

Segregation of Duties 1

State an expected purchase order processing Segregation of Duties control activity other than "authorization of purchases is separate from purchase processing" Use the flowchart to make a conclusion about the design effectiveness and support this conclusion with a short explanation.

Purchasing Accounts Payable General Ledger Inventory Control Receiving Inventory Vendor Need Vendor Receiving Recognized Purchase Report Inv. Sub. Ledger Req. Approved Purchases Vendor List Invoice Journa Inventory Packing Slip Voucher Summary Prepare Purchase Prepare Requisition Purchase Order Purchases Reconcile and Prepare Record Journal Record Purchase Receiving Purchase Voucher Rea Report Purchase Req. Purchase Purchases Purchase Journal Pudon General Ledger Purchase Purchase Receiving Order Order Report Purchase Purchase Receiving Receiving Open Rea. Report Invoice PR Purchase Receiving Order Report R_IC File Open Receiving IC PC Report rFile Vendor Receiving N Purchase Report Purchase Receiving Packing Slip Order Report PR Purchase Receiving Order Report Warehouse Reconcile & Update Records Reconcile and Close PO Inv. Sub. Ledger PR Inventory Summary IC_GL Purchase Receiving Report