Problem 8. Internal Control

Using the following flowchart for of a purchases system, identify SIX major control weaknesses in the system. Discuss each weakness. Guide Questions and Notes - The process starts at the purchases department, is this where the whole P2P process should begin? - Check if the inventory ledger is updated using the appropriate accounting records - Check if the receiving department prepares the receiving report properly - Check if 3-way match is performed prior to posting invoices - Check if the proper reconciliation is performed prior to signing the checks - Check if GL has the necessary vouchers and documents in place prior to posting

Note: Give the 6 weaknesess and discuss the weakness usinh the guide questionsotes

P2P Process Flowchart for Company A PROBLEM 8: INTERNAL CONTROL General Ledger Coples of PO Purchase Vendor Purchases Inventory Control Receiving Accounts Payable Cash Disbursments Purchasing Goods Artive Propares Threo from Vendor Order with Packing Slip Cash Prepare Packing Disbursement PO Voucher Update Inventory Purchase Records Ledger Order Pour Receiving Sign eport AP Ledger Check Purchase Purchase Order Order Receiving Cash Disbursement Check Report Voucher Check Copy Posted GL Gen Ledger Invoice Cash Disbursement Voucher Invoice Check Copy Check Copy Check