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Assignment 7 (Flow Chat)

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hninyuhan
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7 views

Assignment 7 (Flow Chat)

Uploaded by

hninyuhan
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Purchase order process flow:

Inventory level reaches re-order level or sales staff notify about large customer order

Purchase order initiated.

Purchase order approved

Purchase order sent to approved supplier

Goods shipped from south-east Asia

Goods received at warehouse

Receiving report generated by receiving department

Receiving Report Matched with Purchase Order and Supplier's Invoice

Purchase Order and Invoice Entered into General Ledger


Voucher Created by Accounts Payable Department
Payment Requested according to Supplier's Payment Terms

Payment Approved & Cash Payment Made

(b)

Purchase Order Initiation and Approval: The person in charge of initiating purchase orders should not
have approval authority. This segmentation guarantees that purchase requests are examined and
approved by a different person, lowering the possibility of fraudulent transactions.

Receiving and Accounts Payable Functions: The persons in charge of receiving products in the
warehouse should be kept distinct from those in charge of accounts payable. This segmentation
guarantees that the receipt of items is independently verified before payments are completed, lowering
the risk of paying for things not received or receiving goods that were not ordered.

Document Matching: Different personnel or departments should match receiving reports to purchase
orders and supplier invoices. This segmentation increases the likelihood of problems being identified
because different parties independently verify the accuracy of papers.

Authorization and Payment: Payment authorization should be separate from the individuals in charge of
making cash payments. This segregation guarantees that payments are approved by someone other than
the person who has access to company funds, lowering the risk of fraudulent transfers.

General Ledger Entries: The people in charge of entering purchase orders and invoices into the general
ledger should be separate from those in charge of the actual purchasing and receiving procedures. This
segmentation guarantees that financial records are entered correctly and limits the possibility of errors
or fraudulent entries.

By separating these responsibilities, Hardies Wholesaling can strengthen internal controls and lower the
risk of errors, fraud, and mismanagement of corporate resources.

Your purchase order process flow and segregation of duties analysis are well-structured and
comprehensive. Here's a peer review of your work:
The purchase order process flow is clear and easy to follow. Each step is clearly connected, detailing the
sequence of actions involved in the procurement process. The analysis for the segregation of duties is
thorough and aligns with the best practices for internal controls. Provided recommendations for Hardies
Wholesaling to implement segregation of duties effectively and the recommendations are practical and
actionable.

The workflow of the process, along with the segregation of duties analysis, is thorough and well-
structured. The workflow is clearly organized, with each step of purchasing, and provides a
comprehensive analysis of the key roles involved in the process. It could have been better if the
workflow is less wordy and more concise so that way the visual is not too crowded. Your
recommendations for segregating duties are practical and actionable, focusing on minimizing the risk of
fraud, conflicts of interest, and errors.

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