please help me to answer this questions.. Purchase OrderThe following purchase procedures were obtained from Selamat, a store executive. Periodically,he reviews the inventory cards and lists all products for reordering purpose. He decided on thepurchases based upon the minimum inventory needed for each product together with the minimumorder quantity specified by the vendors to determine the ordered quantity. Selamat then refers tothe Vendors' file' for identifying the vendor to deliver the ordered inventories. He then manuallyprepares a pre-numbered purchase order (two copies). He notifies the respective vendors on thepurchase order details via e-mail/fax. The purchase order forms are then filed in 'IncomingPurchase Order' file by date while waiting for the delivery.The vendor fulfils the order and delivers the ordered inventories to SESB's receiving dock. Yourteam was then invited to observe the handling of vendors' delivery in the receiving dock area. Thereceiving dock is an open platform located beside the warehouse entrance in which the lorrydrivers will unload the inventories.The operation employees handle the receiving process. When the delivery arrives, the employeetakes out the respective purchase order copies from the "Incoming Purchase Order' file. Next, theemployee inspects the inventories received for possible damage, verifies that the inventorydescription and the stated quantity on the vendor's delivery note are consistent with theinformation in the purchase order. In several instances, a considerably high number of deliveriesmade by the vendors in a day causing the operation employee struggles to handle the incomingdeliveries. As you observed during the visit, in several deliveries, the operation employee seemsto simply verify the quantity received as per delivery note without physically inspecting andcounting the number of inventories arrived.The operation employees further mentioned that in case of no discrepancies found on the orderreceived, the operation employee signs the designated section for receiving information in thepurchase order form and specifies the receiving date in the purchase order copy. The employeethen keeps the purchase order copies together with the vendor's delivery note into a 'CompletedDelivery' file by the date of receiving.From time to time, Selamat reviews 'Completed Delivery' file for all completed purchase orders.For each delivered order, he updates the quantity received onto the respective inventory card.Then, he forwards the original copy of the purchase order to accounts unit. Meanwhile, the secondcopy of the purchase order and vendor's delivery note is kept accordingly in 'Completed Deliveryfile.Accounts Payable and Cash DisbursementLissa describes as follows of how she handles the cash payment to the SESB's vendors,specifically on the purchase of inventories.Upon receiving the purchase order copy, Lissa temporarily files the purchase order (by suppliername) in 'Incoming Vendor's Invoice' while waiting for the invoice to arrive from the vendor. Whenthe vendor's invoice arrives, she takes out the respective purchase order copy that matches thevendor's invoice. The supplier invoice details are reconciled with the respective purchase order.Lissa gets into SESB's accounting system and records the vendor's invoice by keying-in thereseller's ID. A computer program then reads the vendor's master file and displays the vendor'sdetails on screen. She then records the vendor's invoice details onto the system. A next computerprogram edits and checks the invoice details entered for possible data entry errors. Upon savingthe transaction, the computer program records the transaction into the purchase file and updates the respective vendor's file and subsequently the general ledger master file. She then prints theaccounts payable summary and files together with the purchase order copy and vendor's invoiceby the invoice's due date into an 'Open Invoice' file.When asked about the payment procedures, Lissa elaborated as below:On every Monday, she checks on the 'invoice for payment file' for any outstanding invoices thatare becoming due within that week. For all invoices becoming due, she takes out the invoices withthe attached purchase order copy and enters the vendor's details into the SESB's accountingsystem (account payable cash payment module). Upon entering the vendor's details, a computerprogram retrieves the respective vendor's record from the vendor's master file and displays allpending invoices on screen. She then chooses the invoices for payment and records the paymentdetails. The computer program records the transactions into a cash disbursement file and createsa payment voucher register file. Consequently, the computer program updates the vendor'smaster file and general ledger master file for all transactions entered.Next, she prints a payment voucher for the respective invoices due for payment. She later forwardsthe payment vouchers to Jason, the account manager for payment processing. The accountmanager makes a payment using online banking to the respective vendors as per the paymentvoucher. The payment slip is then given back to her for filing purpose. Finally, she attaches thepurchase order, vendor's invoice, payment voucher and the payment slip into the 'Paid Invoice'file based on the payment date.When asked for any specific reports prepared at the end of each month, Lissa indicated that sheproduces a report from SESB accounting system comprising of purchase summary, accountspayable summary, and total cash disbursement of the month. The reports are forwarded to thegeneral manager.REQUIRED:Questions refers to Purchase Order and (Cash Disbursement procedures.(a)Assess at least THREE (3) possible strengths of internal control procedures that arepresent in the SESB Sdn Bhd's. Provide your justification as to why each of the strengthsidentified is essential for an effective internal control procedure.(b)Identify FOUR (4) possible weaknesses in the SESB's procedures. Provide an appropriateofargumenttosupporteachtheweaknesseshighlighted.

Separation of duties (SoD; also known as Segregation of Duties) is the concept of having more than…

Answered: (b) Identify FOUR (4) possible…

(b) Identify FOUR (4) possible weaknesses in the SESB's procedures. Provide an appropriate of the argument to support each weaknesses highlighted.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q