Instructions

For your initial discussion post, identify the internal control strengths in PEI$$s system, as described in the case study below. Find at least five ways in which PEI$$s processes are exhibiting good internal control.

Please keep to the case study contents. Do not include things not mentioned. There is also an operational issue that is so glaring that it would never happen in the real world.

You will be graded on the following criteria:

Knowledge of strengths in internal control

Knowledge of segregation of duties $($authorization$,$ recording, custody$)$

Case Study

Peyton Electronics, Inc $($PEI$)$ is a small wholesale discount supplier of electronic instruments and parts. PEI$$s competitive advantage is its deep$-$discount, three$-$day delivery guarantee, which allows retailers to order materials often to minimize in$-$store inventories. PEI processes its records with stand$-$alone, incompatible computer systems except for integrated enterprise resource planning $($ERP$)$ inventory and accounts receivable modules. PEI decided to finish integrating its operations with more ERP modules, but because of cash flow considerations, this needs to be accomplished on a step$-$by$-$step basis.

It was decided that the next function to be integrated should be sales order processing to enhance quick response to customer needs. PEI implemented and modified a commercially available software package to meet PEI$$s operations. In an effort to reduce the number of slow$-$paying or delinquent customers, PEI installed Web$-$based software that links to the Web site of a commercial credit rating agency to check customer credit at the time of purchase. The following are the new sales order processing system modules: