What are the key risks when an order is placed?
- Goods not high quality enough for value of money
- unauthorised purchases may be made for personal use
What are the key control objectives when an order is placed?
- purchases should only be from approved suppliers at competitive prices
- purchases are only made for valid business reasons
what are the key controls activities when an order is placed?
- new suppliers must be authorised by management
- evidence needed for need of purchase
- sequentially numbered order forms
- authorisation of order forms by an appropriate manager
- central purchasing department
What are the key risks when goods are received?
- goods accepted when they weren’t ordered
- receipts not recorded
- goods misappropriated
What are the key control objectives for when goods are received?
- only goods ordered are accepted
- all receipts recorded
- goods received should be stored securely
What are the key control activities for when goods are received?
- examine goods inwards for quantity, quality
- record goods inward on sequentially numbered goods receipt notes
- match GRNs to invoices
- physical controls over stores
What are the key risks when invoices are raised?
- invoices not received
- incorrect invoices
What are the key control objectives when invoices are raised?
- check invoices are correct
- all credit notes to which the company is entitled are claimed
What are the key control activities when invoices are raised?
- match invoice details to GRNs
- arithmetic check on supplier invoices
- claim credit notes for all goods rejected/ returned
What are the key risks when purchases are recorded?
- purchases may not be recorded
- purchases recorded with no receipt
What are the key control objectives when purchases are recorded?
- all valid purchases are recorded at correct amount
- purchases recorded in correct supplier accounts
What are the key control activities when purchases are recorded?
- match cash payments to invoices
- compare monthly supplier statement to payables ledger balances
- reconciliation of purchase ledger with nominal ledger
What are the key risks when cash is paid?
- false invoices paid
- payments are not recoded at he correct amount or in correct supplier accounts
What are the key control objectives when cash is paid?
- payment s only made for goods received
- only valid expenditure is paid
- payments only made once
- payments are recorded correctly
What are the key control activities when cash is paid?
- segregation of duties
- payment approved after checking supporting documentation
- invoices labelled as paid to avoid duplication
- appropriate limits set on amounts that can be authorised
- compare monthly supplier statements to payables ledger balances
