Control Procedure a. Accept only deliveries for which an approved purchase order exists. b. Document all transfers of inventory Threat 1. Failing to take available purchase discounts for prompt payment 2. Recording and posting errors in accounts payable 3. Paying for items not received 4. Kickbacks 5. Theft of inventory 6. Paying the same invoice twice 11 7. Stockouts 8. Purchasing items at inflated prices c. Restrict physical access to inventory, d. File invorda by due date e Maintain a sh budget. f Conduct an automated comparison of total change in cash to total changes in accounts payable. 8. Adopt a perpetual inventory system. h. Require purchasing agents to disclose financial or personal interests in suppliers i. Require purchases to be made only from approved suppliers j Restrict access to the supplier master data. k. Restrict access to blank checks 9. Misappropriation of cash 10. Purchasing goods of inferior quality 11. Wasted time and cost of returning unordered merchandise to suppliers 12. Accidental loss of purchasing data 13. Disclosure of sensitive supplier information (e.g., banking data) 1 Issue checks only for complete voucher packages (receiving report, supplier invoice, and purchase order) m. Cancel or mask "Paid" supporting documents in voucher package when check is issued. n. Carry out a regular backup of expenditure cycle database 0. Train employees in how to properly respond to gifts or incentives offered by suppliers. p. Hold purchasing managers responsible for costs of scrap and rework 9 Ensure that someone other than the cashier reconciles bank accounts