Controls Of Flows Essay

1629 WordsFeb 16, 20127 Pages
Controls for Outflows Farishta Hassanpur, Jeremy Keturi, Daniel Meixner ACC 544 September 22, 2011 Vaughn Johnson Controls for Outflows This questionnaire will assist most manufacturing and service businesses in determining if correct internal control practices have been implemented for outflows. Most outflows will fall into one of the following six categories: purchasing, accounts payable, cash disbursements, finance, investment, and payroll. Control Activities for Purchasing and Accounts PayableAddresses Fraud or Significant Risk?Control Has Been Implemented?Automated?Effectively Designed?Test Control?CommentsProper segregation of duties should be in place and operating for the following responsibilies: ● initiate purchase orders. ● approve purchase orders. ● place the purchase orders. ● Receive the orders. ● Record to accounts payable. ● Pay accounts payable. ● custody of inventory or assets. ● Record keeping for purchases and payments. ● Reconciliation of purchases and accounts payable.The purchasing department, accounting department, receiving department, and shipping department should all be independent of each other.Accountants should only record accounts payable when supporting documents are in order. Accountants should record purchases and payable as of the date the goods or services are received. Purchases over a specified dollar amount should be approved by more than one person.Checks should be prenumbered and all checks accounted for.Purchases journal should be tested to look for patterns and controls.Incoming purchases should be compared with purchase orders to ensure everything ordered arrived and receiving report should be

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