Organizations frequently use procurement cards (often referred to as PCards) to purchase goods or services using processes outside normal acquisition and cash disbursement procedures. PCards are a form of company charge card that are issued to approved employees who are expected to comply with company PCard policies and operating procedures. In many cases, PCards replace petty cash funds used to make smaller purchases on short notice. While providing a number of conveniences for organizations, the use of PCards involves risks that should be addressed by internal controls. To learn more about effective PCard policies and procedures, perform the following:
Required:
a. Visit the Fraud Magazine Web site (www.fraud-magazine.com) and search for the November/December 2011 article Preventing, Detecting, and Investigating Procurement Card Abuse by using the search string procurement card abuse.
b. Identify three preventative and three detective internal controls related to the use of PCards.
c. Briefly describe the purpose of each internal control identified in b.