The PureProducts Company sells medical supplies to hospitals, clinics and doctor’s offices. PureProducts uses an ERP system for all its business processes. These supplies are maintained on a real-time basis in an inventory database in an enterprise system. The inventory records include reorder points for all regularly used items and one or two preferred vendors for each item. Vendors are researched and approved by the purchasing manager before being added to the vendor database by a clerk designated to maintain the database. PureProducts employs the following procedures for purchasing and receiving.

Throughout the day, the supplies clerk receives from the enterprise system an online report listing those items that have reached their reorder point. The clerk reviews the report and creates a purchase requisition by filling out a requisition from in the company’s enterprise system. Each requisition has a unique identifier, and after creation, the purchase requisition data and inventory master data are updated to reflect the purchase requisition. Inventory manager approval is required for purchases over $1000 and not covered by a blanket order. The inventory manager can log on to the enterprise system any time to look at open purchase requisitions that require approval and to approve those requisitions by checking the acceptance box. The computer records those approvals on the purchase requisition data.

Throughout the day, buyers in the purchasing department receive from the enterprise system online approved requisitions with a list of appropriate vendors. They select a vendor and enter PO data. After the PO is saved, the purchase requisition data and inventory master data are updated. The completed, pre-numbered PO is then printed in the purchasing department and mailed to the vendor.

The receiving department inspects and counts the goods when they are received, compares the count to the packing slip, pulls up the PO in the enterprise system, and enters the quantity received. The PO and inventory master data are updated after the receiving record is saved. The general ledger master data are also updated to reflect the increase in the inventory balance.

Required:

1. Draw a systems flowchart

2. Prepare a control matrix, including explanations of how each recommended existing control helps to accomplish- or would accomplish in the case of missing plans- each related control goal

3. Annotate the flowchart prepared in part 1 to indicate the points where the control plans are being applied(codes P-1,.... P-n) or the points where they could be applied but are not( codes M-1,.....M-n).

Answer rating: 100% (QA)

Solution a Tab 1 AP Team receives invoices On receipt AP Clerk validate invoices with PO Tab 2 Variation exist more than 5 either on price quantity Ta... View the full answer