Discuss the key internal controls that should be present in the processing purchase orders function in the acquisitions and payment cycle.
Proper authorization for acquisitions ensures that the goods and services acquired are for authorized company purposes, and it avoids the acquisition of excessive or unnecessary items. Most companies require different levels of authorization for different types of acquisitionsor dollar amounts . A purchasing department that is independent of the authorization or receivingfunctions is often established by companies to ensure an adequate quantity of goods and services at a minimum price. Purchase orders should be prenumbered to permit easier accounting for all outstanding purchase orders and should be designed to minimize the likelihood of unintentional omissions on the form when goods are ordered. Payment to be made after getting the full approval from the head. It must be processed in a proper well defined manner as in who has to do which work. Bills should be handled by a person other than the person paying/ processing such amount.
Discuss the key internal controls that should be present in the processing purchase orders function in...
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13-26 (Objectives 13-1, 13-4, 13-5) The following are independent internal controls commonly found in the acquisition and payment cycle. Each control is to be considered independently. Before a check is prepared to pay for acquisitions by the accounts payable department, the related purchase order and receiving report are attached to the vendor’s invoice being paid. A clerk compares the quantity on the invoice with the receiving report and purchase order, compares the price with the purchase order, recomputes the extensions,...
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20. Match the activities to the appropriate level they are grouped in: 1. processing purchase orders 2. design new products 3. hire a new employee 4. process a unit in the manufacturing process a. organization sustaining b. unit level c. product level d. batch level Understanding the step process is where I'm struggling most.