Kent Limmuel B. Tan BSA V

Case Analysis for BA 184.1 - COMPUTER-BASED ACCOUNTING SYSTEM

Case 1: Walker Books Inc.

Internal Control Weaknesses:

Purchase System

The purchasing agent should have not be the one in charge to monitorthe level of books/inventory available. There should have been apersonnel assigned for inventory control and the one that wouldauthorize or generate the purchase order.

The receiving dept. clerk should have been checking the goods forpossible defect or difference in quantity upon unloading the goods. It isnot enough that the clerk just reconcile the packing slip and purchaseorder.

The accounts payable department should not be the one reconciling thepurchase order and the invoices at the same time recording it to thegeneral ledger and in the subsidiary ledger.

The AP Department should reconcile the quantity and price of thebooks to its PO, its Receiving Report and the Suppliers Invoice.

Cash Disbursements System There are no supporting documents or a valid vendor file present when

signing and distribution of the check happens. The sales invoice should not be treated as trash or destroyed. The Accounts Payable clerk should not be the one who prepares the

amount due as per the invoice. There should have been propersegregation of duties to avoid possibility of fraud.