AccountingInformationSystemChapter13ed12Solutions.docx

1、AccountingInformationSystemChapter13ed12SolutionsChapter 13 SolutionsQ13.3 Since the primary benefit of procurement cards is to give employees the ability to make small non-inventory purchases necessary for their area of responsibility be it office supplies, computer or office equipment, meals and/o

2、r travel expenses, a formal approval process for all purchases would negate the benefit of the procurement card. Therefore, the controls for procurement cards should be focus on the initial issuance of the card and subsequent reviews and audits of purchases made by employees entrusted with procureme

3、nt cards. Employees receiving cards must be properly trained in their proper use and in the procurement card controls implemented by the organization. If employees know that any purchase they make can be the subject of subsequent review and audit, they are more likely to make legitimate purchases. S

4、ubsequent reviews and audits must also require proper documentation related to each purchase made with the procurement card. During procurement card training, it should be emphasized that employees will be required to produce original receipts or other formal documentation for all items purchased. P

5、13.1 a. Require a purchase requisition from an operating department as authorization for preparation of all purchase orders. Before approving a purchase order, the purchasing manager should review the related purchase requisition. The purchasing manager also needs to ensure that orders are placed on

6、ly with approved vendors. Also, company policy should require that purchasing agents disclose any financial interest or position which they hold in supplier companies, though this may be difficult to enforce. In addition, the purchasing manager should check to ensure that purchasing agents do not ha

7、ve investments in vendors on the approved vendor list. b. Warehouse personnel should be required to count goods received and acknowledge receipt of the specified quantity by signing a copy of the receiving report. This copy of the receiving report would then be reviewed by accounts payable personnel

8、 prior to approval of payment. In on-line systems, the warehouse personnel would enter receipt of goods into the system. The system would then match that receiving report with the purchase order and vendor invoice prior to approving payment. c. Receiving department personnel should be required to ve

9、rify that a purchase order exists prior to accepting a shipment. Also, invoices should be compared to purchase order records prior to approval of the invoices for payment. d. Proper invoice filing by payment date and proper cash budgeting. e. When an invoice is approved for payment, the related supp

10、orting records (receiving report and purchase order) must be reviewed. At the conclusion of this process, the status of both the invoice and its supporting records should be changed, for example from pending to paid. In this way the supporting records cannot be used twice to support payment of a dup

11、licate invoice. f. Periodic physical inventories should be taken, and the resulting counts used to correct system records.g. Most effective here would be closed loop verification in which the item number is entered as input, and the system displays the corresponding item description and then asks th

12、e user to verify that this is the desired item.h. Unused blank company checks should be stored in a secure location. In addition, the person signing checks should be different from the person authorizing disbursements and preparing checks, and the check signer should review the documentation (purcha

13、se order and receiving report) supporting each disbursement prior to signing each check. i. Supporting documentation reviewed by the person who authorizes disbursements should include both a purchase order and a receiving report. In addition, the person signing checks should be different from the pe

14、rson authorizing disbursements and preparing checks, and the check signer should review the documentation (purchase order and receiving report) supporting each disbursement prior to signing each check.j. Surprise counts of cash on hand in the petty cash fund should be made periodically, and the tota

15、l of cash plus receipts should equal the fund amount.k. Restrict access to supplier master files, require a thorough background check, and proper approvals by management before a supplier could be added to the approved supplier list.l. This scenario requires collusion between an employee and a custo

16、mer. Thus, the best control to hire honest and ethical employees by conducting effective interviews, checking references, and even conducting background checks if cost effective. To help honest employees stay honest, the store could restrict access to price tags in that cashiers should not have acce

17、ss to price tags and stocking clerks should not work as cashiers. In addition, sales data could be evaluated using analytical procedures to screen for significant price variances. This analytical procedure combined with linking the cashier/sales person who conducted the transaction to the transactio

18、n would likely detect the fraud and also act as a deterrent to other employees.13.2 Match the terms in the left column with their appropriate definition in the right column.TermsDefinitions1. _n_ economic order quantitya. A document that creates a legal obligation to buy and pay for goods or service

19、s.2. _f_ materials requirements planning (MRP)b. The method used to maintain the cash balance in the petty cash account.3. _e_ Just-in-time (JIT) inventory systemc. The time to reorder inventory based on the quantity on hand falling to predetermined level.4. _g_ purchase requisitiond. A document use

20、d to authorize a reduction in accounts payable when merchandise is returned to a supplier.5. _b_imprest funde. An inventory control system that triggers production based upon actual sales.6. _a_ purchase orderf. An inventory control system that triggers production based on forecasted sales.7. _s_ ki

21、ckbacksg. A document only used internally to initiate the purchase of materials, supplies, or services.8. _r_ procurement cardh. A process for approving supplier invoices based on a two-way match of the receiving report and purchase order.9. _p_ blanket purchase orderi. A process for approving suppl

22、ier invoices based on a three-way match of the purchase order, receiving report, and supplier invoice.10. _h_ evaluated receipts settlement (ERS)j. A method of maintaining accounts payable in which each supplier invoice is tracked and paid for separately.11. _m_ disbursement voucherk. A method of ma

23、intaining accounts payable which generates one check to pay for a set of invoices from the same supplier.12. _q_ receiving reportl. Combination of a purchase order, receiving report, and supplier invoice that all relate to the same transaction.13. _d_ debit memom. A document used to list each invoic

24、e being paid by a check.14. _o_ vendor managed inventoryn. An inventory control system that seeks to minimize the sum of ordering, carrying, and stockout costs.15. _l_ voucher packageo. A system whereby suppliers are granted access to point-of-sale (POS) and inventory data in order to automatically

25、replenish inventory levels.16. _j_ non-voucher systemp. An agreement to purchase set quantities at specified intervals from a specific supplier.17. _k_ voucher systemq. A document used to record the quantities and condition of items delivered by a supplier.r. A special purpose credit card used to pu

26、rchase supplies.s. A fraud in which a supplier pays a buyer or purchasing agent in order to sell its products or services.13.4 Match threats in the first column to appropriate control procedures in the second column. More than one control may be applicable.ThreatControl Procedure1. _d,e_ Failing to

27、take available purchase discounts for prompt payment.a. Only accept deliveries for which an approved purchase order exists.2. _f_ Recording and posting errors in accounts payable.b. Document all transfers of inventory.3. _l_ Paying for items not received.c. Restrict physical access to inventory.4. _

28、h,o_ Kickbacks.d. File invoices by due date.5. _b,c,g_ Theft of inventory.e. Maintain a cash budget.6. _m,l_ Paying the same invoice twice.f. Automated comparison of total change in cash to total changes in accounts payable.7. _g,b,c_ Stockouts.g. Adopt a perpetual inventory system.8. _h,i,j,o_ Purc

29、hasing items at inflated prices.h. Require purchasing agents to disclose financial or personal interests in suppliers.9. _k,q_ Misappropriation of cash.i. Require purchases to be made only from approved suppliers.10. _h,i,o,p_ Purchasing goods of inferior quality.j. Restrict access to the supplier m

30、aster data.11. _a_ Wasted time and cost of returning unordered merchandise to suppliers.k. Restrict access to blank checks.12. _n_ Accidental loss of purchasing data.l. Only issue checks for a complete voucher package (receiving report, supplier invoice, and purchase order).13. _j_ Disclosure of sen

31、sitive supplier information (e.g., banking data).m. Cancel or mark “Paid” all supporting documents in a voucher package when a check is issued. n. Regular backup of the expenditure cycle database.o. Train employees how to respond properly to gifts or incentives offered by suppliers.p. Hold purchasin

32、g managers responsible for costs of scrap and rework.q. Reconciliation of bank account by someone other than the cashier.13.8 The following list identifies several important control features. For each control, (1) describe its purpose and (2) explain how it could be best implemented in an integrated ERP system.a. Cancellation of the voucher package by the cashier after signing the check.b. Separation of duties of approving invoices for paym