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AFAQ Books store is one of the fastest growing book distributer in Gaza. In this company the purchasing process begins when a clerk in the warehouse reviews the inventory subsidiary ledger in his

AFAQ Books store is one of the fastest growing book distributer in Gaza. In this company the purchasing process begins when a clerk in the warehouse reviews the inventory subsidiary ledger in his department for items that have fallen to their reorder point. When inventory is needed the clerk selects the vendors based on his experience and creates five copies of purchase orders. One copy is filed in the open purchase order file which is located in warehouse, two copies are sent the suppliers, one copy is forwarded to the account payable and the last copy is sent to receiving department.

When goods are received in the warehouse, the purchase order is pulled from the open purchase order file and a clerk reconciles the goods to the packing slip and purchase order. The clerk places the goods on the warehouse shelves and manually prepares receiving reports. One copy of the receiving report is sent to account payable. Second copy is sent to receiving department, where the department uses it to update inventory subsidiary ledger. In the account payable department the clerk files the purchase order, receiving report and invoice in account payable open file. Finally, the clerk uses these documents to update the account payable subsidiary ledger as well as update control accounts in general ledger.

Required:

  1. Create a system flowchart of the existing system?
  2. Analyze the internal control weaknesses in the system?           

    AFAQ Books store is one of the fastest growing book distributer in Gaza. In this company the purchasing process begins when a clerk in the warehouse reviews the inventory subsidiary ledger in his department for items that have fallen to their reorder point. When inventory is needed the clerk selects the vendors based on his experience and creates five copies of purchase orders. One copy is filed in the open purchase order file which is located in warehouse, two copies are sent the suppliers, one copy is forwarded to the account payable and the last copy is sent to receiving department.

    When goods are received in the warehouse, the purchase order is pulled from the open purchase order file and a clerk reconciles the goods to the packing slip and purchase order. The clerk places the goods on the warehouse shelves and manually prepares receiving reports. One copy of the receiving report is sent to account payable. Second copy is sent to receiving department, where the department uses it to update inventory subsidiary ledger. In the account payable department the clerk files the purchase order, receiving report and invoice in account payable open file. Finally, the clerk uses these documents to update the account payable subsidiary ledger as well as update control accounts in general ledger.

    Required:

  3. Create a system flowchart of the existing system?
  4. Analyze the internal control weaknesses in the system?   

Apr 14 2021 View more View Less

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