As an internal auditor of Helmysha Sdn Bhd, Harini is required to perform an audit of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
As an internal auditor of Helmysha Sdn Bhd, Harini is required to perform an audit of activities within the purchasing department. The department employs 10 purchasing agents, two supervisors, a manager and a clerk. Purchases total about RM1.25 million a year. The audit disclosed the following scenarios: a) b) Purchasing agents select proposed sources without submitting the list of bidders for reviews. The audit test disclosed that no evidence of higher costs were incurred as a result of that practice. Purchasing agents who originate written requests for quotation from suppliers receive the supplier's bids directly from the mailroom. In the audit test of 100 purchases based on competitive bids, Harini found that, in 75 of 100 cases, the low bidders were awarded the purchase orders. Based on the scenarios, state the risk/threat incurred if both scenarios described is permitted to continue in the future. Identify potential internal control, if any, that Harini should recommend to prevent continuation of the scenarios described. Harini believes that of all risks, probably the most serious risk associated with the cash disbursement function is theft or misappropriation of funds. To strengthen the internal control procedures over cash disbursement, what should Harini suggest to the top management of purchasing department? Discuss any five (5) recommendations. As an internal auditor of Helmysha Sdn Bhd, Harini is required to perform an audit of activities within the purchasing department. The department employs 10 purchasing agents, two supervisors, a manager and a clerk. Purchases total about RM1.25 million a year. The audit disclosed the following scenarios: a) b) Purchasing agents select proposed sources without submitting the list of bidders for reviews. The audit test disclosed that no evidence of higher costs were incurred as a result of that practice. Purchasing agents who originate written requests for quotation from suppliers receive the supplier's bids directly from the mailroom. In the audit test of 100 purchases based on competitive bids, Harini found that, in 75 of 100 cases, the low bidders were awarded the purchase orders. Based on the scenarios, state the risk/threat incurred if both scenarios described is permitted to continue in the future. Identify potential internal control, if any, that Harini should recommend to prevent continuation of the scenarios described. Harini believes that of all risks, probably the most serious risk associated with the cash disbursement function is theft or misappropriation of funds. To strengthen the internal control procedures over cash disbursement, what should Harini suggest to the top management of purchasing department? Discuss any five (5) recommendations.
Expert Answer:
Answer rating: 100% (QA)
RECOMMENDATIONS FOR STRENGTHEN THE INTERNAL CONTROL PROCEDURES OVER CASH DISBURSEMENT IN PURCHASE DE... View the full answer
Related Book For
Fraud examination
ISBN: 978-0538470841
4th edition
Authors: Steve Albrecht, Chad Albrecht, Conan Albrecht, Mark zimbelma
Posted Date:
Students also viewed these accounting questions
-
As an internal auditor for CRA, Inc., you are assigned to a team working on an ongoing project to identify possible fraud. The project started with time trend analysis of purchase prices of all items...
-
An internal auditor of Murry Manufacturing Company has just been assigned to perform an operational audit of the companys inventory warehousing procedures. The company manufactures seven lines of...
-
As an internal auditor for the state auditors office, you are assigned to review the implementation of a new computer system in the state welfare agency. The agency is installing an online computer...
-
We have all experienced workplace or personal changes that required us to adjust our daily actions at work or at home. Select one of the changes below, and explain how you have adapted to that change...
-
A faulty thermocouple in a carburizing heat-treatment furnace leads to unreliable temperature measurement during the process. Microstructure analysis from the carburized steel that initially...
-
Calculate the isoelectric and isoionic pH of 0.010 M threonine.
-
Radiation interactions are of importance in crystal pullers for growing crystals from melts since these operate at very high temperatures. The radiation view factors change at various stages of...
-
The Village of Delmar is preparing its government- wide statement of activities for the year ended December 31, 2013. Analysis of the data accumulated thus far shows the following expenses for each...
-
= Suppose that we happen to know that the mean commute time of all WCU commuters is 40.1 minutes with a standard deviation of 5 minutes: 40.1 minutes; = 5 minutes. Suppose we took a random sample of...
-
Your task is to build a JEE web application that uses Enterprise JavaBeans (EJB) and Java Persistence API (JPA) to manage the persistence of Java objects to a relational database. The application...
-
Well functioning financial markets benefit, efficiently. consumers O lenders O creditors O cashiers Oborrowers by allowing them to time their purchases more
-
How useful or informative do you think psychologicaland honesty tests are? Is their use a reasonable business policy? Assuming that tests like those described are valid and reliable, are they fair?...
-
List down 25 example questions for each element of service quality dimensions (SERVQUAL) for food service at food court. This question can be as questionnaire or survey to give the customer to know...
-
How do you make sure you meet the consideration requirement when enterining into a contract? How do you make sure you meet the consideration requirement when renogiating an existing contract? Given...
-
For small animal surgery services, a computerized heart-lung machine must have a reliability of 0.995. Two technologies are available for the heart-lung machine: one produces a 0.999 reliability for...
-
What if your organization is a family business? How would you control your family members if you had authority & power over them? (keep in mind you need them & care about their well-being!) When...
-
Write the expression as one logarithm. 5 loga x + 3 * loga(x 9) 7 log,(5x + 8)
-
Prove that if Σ an is absolutely convergent, then a. an
-
You are the new controller of a major U.S. manufacturing firm. In your previous employment, you detected multiple varieties of fraud. The CFO of your new company informs you that top management is...
-
The federal government gives huge rewards for taking action to expose fraud against itself. Under federal law, if you have personal knowledge that an individual, business, city, county, or town has...
-
Explain what is meant by "cutoff problems" as they relate to accounts payable.
-
Assume the same facts as in Problem 42. Further assume that next year, Gary sells the SUV for $20,000. a. How much depreciation expense can Gary deduct as a business deduction with respect to the SUV...
-
Describe how liabilities are reported and analyzed.
-
Assume the same facts as in Problem 29, except that Sally has AGI of \($75,000.\) What is her qualified student loan interest deduction in 2019? Problem 29, In 2019, Sally Morris, a single taxpayer,...
Study smarter with the SolutionInn App