Beruflich Dokumente
Kultur Dokumente
services
(expenditure in the cycles title) Expenditure or Disbursement Cycle
Payment of cash
(disbursement) For the services acquired
a. Purchasing a. Resources (goods and services ) are required from vendors in exchange b. Receiving b. Obligations to vendors and employees are paid c. Recording
b. Account Distributions
b. Purchase orders
d. Payment ( inclu- ding d. Adjustments authorizing and preparing checks e. Cash Disbursements
PURCHASE ORDER
RECEIVING REPORT
VENDOR'S INVOICE
VOUCHER PACKAGE
Requisitioning dept.
Purchasing
requisition purchase order purchase order purchase order 3 purchase
purchase requisitio n
order
purchase
order
To vendor
To receivin g
File
To Account s payable
from purchasi ng
Receiving
Log
3 3
purchase order
To Pur chasing
File
From mailroom
Accounts payable
Receiving Report
Invoice
Receiving Report
1
Invoice
voucher daily summary
compar e
2
daily summary
File
File by due
date
1
Prepare voucher and daily summary
To
Genera l Accoun - ting
File
requisition purchase order Receiving Report Invoice voucher To genera l Accou n t ing and Ac counts payabl e summary requisition
2
check summary
1
file
To vendo r
File purchase orders until goods are received Upon receipt of goods, count quantities and compare with purchase order Prepare receiving report Forward goods to Inventory control Forward copies of receiving report to Accounts Payable and to Purchasing; retain file copy of receiving report, purchase order, and update receiving log
Purchasing and Cash Disbursements: Objectives, Potential Errors or Frauds, and Control Procedures
Control Objectives Types of Errors or Frauds that could Control Procedures designed to occur if Objectives is NOT met Prevent or Detect Errors or Frauds
Purchase could be made from unauthorized vendors, potentially resulting in purchasing from related parties without senior managements knowledge or from foreign vendors in violation for import quotas
Establishing criteria for adding to, changing, or deleting from the vendor list Types, quantities, payment, terms, and prices should be approved for all products and services Unnecessary goods may be ordered, potentially resulting in write-downs of unusable or unsaleable inventory Maintain updated guidelines for purchase transactions (e.g. competitive bids, specific authorization for all purchases exceeding minimum dollar amounts) Establish procedures for reviewing and approving purchase prices and terms prior to purchase
Goods may be purchased at noncompetitive prices or unfavorable terms, resulting in reduced earnings
Purchasing and Cash Disbursements: Objectives, Potential Errors or Frauds, and Control Procedures
Control Objectives Types of Errors or Frauds that could occur if Objectives is NOT met Control Procedures designed to Prevent or Detect Errors or Frauds
Damaged or unordered goods could be accepted, potentially creating delays in receiving the goods desired
Establish procedures for inspecting and counting goods received before releasing the carrier
Prenumber and control vouchers and checks
All cash disbursements for goods and services should be based on a bona fide liability
Require manual dual signatories for all checks over a prespecified amount
Purchasing and Cash Disbursements: Objectives, Potential Errors or Frauds, and Control Procedures
Control Objectives Types of Errors or Frauds that could occur if Objectives is NOT met Goods may be received but not reported, potentially resulting in understated inventory and liabilities Account balances may be inaccurate, potentially resulting in misstated financial statements Control Procedures designed to Prevent or Detect Errors or Frauds Prenumber receiving reports, and subsequently review for prompt recording Total input documents (e.g., number of documents, dollar amounts) and reconcile journals and ledgers
All goods and services received should be accurately and promptly recorded Purchases and cash disbursements transactions should be recorded properly and in the proper accounting period
Establish processing and recording procedures Purchases and cash Summaries of detailed records may disbursements transactions not agree with control accounts should be posted accurately to individual vendor accounts Transactions may be posted to improper vendor accounts, potentially resulting in improper payments Establish validation procedures to verify postings (e.g., check digits)
Promptly investigate
Purchasing and Cash Disbursements: Objectives, Potential Errors or Frauds, and Control Procedures
Access to Assets Control Objectives Access to purchasing and cash disbursement records and to forms and documents should be restricted to personnel authorized by management
Records, form, or documents may Establish physical controls over be misused by unauthorized unused forms and documents personnel, potentially resulting in misstated payables or diversion for personal use Segregate responsibilities for authorization, execution, and recording functions Maintain listings and samples of authorized signatories