Accounting

Information System solution, but error in

SUMMARY CH. 13 inventory management still
The Expenditure Cycle: can occur because the
Purchasing to Cash Disbursements cashier manually input the
quantity (different flavors
Expenditure Cycle Information System doesnt matter). It may
- Process: lead to correct amount of
o Ordering money but incorrect
o Receiving quantity control
o Approving Supplier Invoices o Periodically count on hand
o Cash Disbursement inventory,compare with
- Thread & Controls perpetual (interim).
GAMBAR 2. Purchasing unurgent items.
Ordering Materials, Supplies, and o Approval of purchase
Services requisitions
Identifying what,when,how o Centralized purchasing
- Process item to omit multiple
o EOQ (economic order purchases
quantity) how much to Choosing Supplier
order. Depends on - Process:
ordering, carrying, and o Price
stockout costs Blanket purchase order
o Reorder Point when to agreement to purchase at
order. Depends on delivery specified price
time and desired level of Vendor-managed Inventory
safety stock suppliers are given
o MRP (materials access, so automatically
requirements planning) restock (cuts carrying cost
accurate sales forecasting & processing cost by
to better schedule eliminating the need of
purchases, to carry less formal purchase order)
inventory o Quality (cost of scrap and
o JIT purchasing & rework),
producing goods only for o Dependability in deliveries
actual rather than (time to deliver).
forecasted sales. But it
need to carry sufficient raw - Threats & Control:
materials to response the 1. Purchasing items at inflated
customer demand price (company must secure
- Thread & Control the best price)
1. Inaccurate inventory records o Price list
stockouts / excess: increase o Review purchase order
costs o Compare actual with
o Perpetual inventory budget allowance
o IT to minimize the
possibility of human error.
Barcode is one of the
Athiyya Nabila Ayu
Romney Accouting Information System
2017
 2. Purchasing goods of inferior 2. Mistakes in Counting Items
quality Received
o Purchasing from approved o To encourage receiving
supplier clerk count correctly,
o Review new supplier company let the quantity
o Purchasing manager ordered field remain blank
responsible to rework and o Sign / enter employee ID to
scrap cost receiving report system
o Monitoring product quality o Offer bonus when they
(tracking how often its catch discrepancies
items are under standard) between packing slip &
3. Unreliable Performance by actual order
Supplier o Use barcode
o ISO 9000 o ERP system to flag
o Track supplier performance discrepancies
(compare promise with 3. Verifying Receipt of Services
delivery date) 4. Theft of Inventory
4. Purchasing from Unauthorized o Restricted access
Suppliers o All transfer should be
o Prevent issuing PO to documented
supplier that out of the list o Periodically count
o Review PO inventory in hand
5. Kickbacks (kolusi) o Segregation of duties
o Prohibit accepting any gift Approving Supplier Invoices
o Job rotation - Process
o Supplier required to assign AP department approve supplier
annual conflict of interest invoices matching it with PO and
statement receiving report
Receiving Advantage of voucher systems:
- Process - Reduce number of check need to
Delivery arrive receiving clerk be written
compare PO on packing slip VS - Disbursement voucher can be
open purchase order file count prenumbered to simplify tracking
make receiving report (date of payables
received, supplier, PO number, - Voucher indicates that the invoices
quantity) already approved for payment

If there are damaged goods, Alternative way to eliminate supplier
incorrect quantity amount put it invoice:
in the debit memo Evaluated Receipt Settlement (ERS)
ERS replaces the traditional three-way
- Threat & Control matching process (supplier invoice,
1. Accept unordered goods receiving report, and purchase order)
o Receiving department with two-way match of the purchase
should only accept within order and receiving report.
approved PO (they can
open PO file)
Athiyya Nabila Ayu
Romney Accouting Information System
2017
 Cash Disbursement
- Process
The cashier, who reports to the
treasurer, is responsible for paying
supplier.

Segregates the custody function
(cashier) from the authorization
and recording functions
(purchasing and accounts payable
departments)
- Threat & Control
1. Fail to take purchase discount
o Print periodic list of invoice
due
o Cash flow budget
2. Paying for goods not received
o Inventory control
department need to verify
the quantities on receiving
report
o Budgetary controls
o Reimbursement of
Employees travel not
only airplane recept but
also conference agenda
o Use corporate credit card
ex: employee stay in
cheap hotel but asked
- Threat & Control reimbursement for
1. Error in Supplier Invoices expensive one
o Check mathematical 3. Duplicate payment
accuracy o Approve invoice only when
o Card purchases keep accompanied with
receipt & verify with complete voucher
monthly statement o Original copy
o Adopting the ERS approach 4. Theft of Funds
eliminates the potential o Restricted Access with
for errors in supplier password & ID to cash &
invoices because periodically count
companies pay by matching o Designate specific
counts of what they receive computer for mobile
with prices quoted when banking
the goods were ordered.
o Control access to supplier
master file

Athiyya Nabila Ayu
Romney Accouting Information System
2017