Charlie Cardinal Research is a company that performs research and support for startup companies connected with BSU. The following narrative describes the process to acquire materials for the companies.
A purchasing manager determines the materials needed for a company and purchases them from a vendor. The purchasing manager completes a purchase order for materials for each vendor for each start up entity. A catalogue price is used or the vendor is contacted by telephone to determine the price. The purchase order has an original and two copies (Copy #1 and Copy #2). The purchasing manager sends the purchase order to the head of the startup entity for approval/disapproval. The head of the startup entity writes "approved" or "disapproved" on the purchase order , signs it, and returns it to the purchasing manager. The purchasing manager sends the original copy of approved purchase orders to the vendor, sends Copy #1 to the accounting clerk, and files Copy #2 in a permanent file (ordered numerically by purchase order number). Disapproved purchase orders are included in the permanent file to ensure a complete numerical order of purchase orders. The accounting clerk files Copy #1 in a temporary file (by date).
The purchasing manager receives and inspects materials sent from the vendor and compares them to the packing slip. The packing slip is sent to the accounting clerk as evidence that the materials have been received. The accounting clerk matches the packing slip with the Copy #1 of the purchase order and prepares a check (which has an original and one copy). The check is attached to the packing slip and Copy #1 of the purchase order is sent to the purchasing manager for a signature. Once signed, the entire set of documents is returned to the accounting clerk who sends the original copy of the check to the vendor, and files the copy of the check with the supporting documentation attached to it in a permanent file (ordered numerically by check number).
Required:
- Prepare a flowchart in Microsoft Excel following the flowchart conventions as discussed in class.
- Discuss the internal control weaknesses in the flowchart. Propose recommended fixes to the situation (you may have to involve other individuals or system controls to address the weaknesses).