Term
| Inaccurate inventory records |
|
Definition
-Perpetual inventory system
-Bar codes and RFID
-Periodic physical counts with reconciliation |
|
|
Term
| Purchase items not needed |
|
Definition
-Perpetual inventory system
-EOQ, MRP, JIT systems
-Approval of requisitions
-Centralized purchasing function |
|
|
Term
|
Definition
-Price lists
-Competitive bidding
-Review and approval of POs
-Budget and comparison of actual to budgets |
|
|
Term
|
Definition
-Pre-approved suppliers only
-New supplier audit and approval
-Responsibility for scrap or rework
-Quality surveillance and reporting |
|
|
Term
|
Definition
-Supplier quality certifications (eg, ISO 9000)
-Audit and monitor supplier performance |
|
|
Term
|
Definition
-Application control to prevent unauthorized
-New supplier audit and approval |
|
|
Term
|
Definition
-Policy, training, signed statements, personal disclosure
-Job rotation and mandatory vacations
-Supplier audits to validate PO |
|
|
Term
| Accepting unordered items |
|
Definition
|
|
Term
|
Definition
-Do not disclose expected quantity
-Bar codes and RFID
-Transfers are re-counted and documented
-Application controls report discrepancies |
|
|
Term
| Verifying receipt of services |
|
Definition
-Document receipt with signature
-Budget controls and audits |
|
|
Term
|
Definition
-Physical access controls
-Document transfers
-Perpetual inventory system
-Physical count of inventory and reconciliation
-Segregation of duties |
|
|
Term
| Errors in Supplier invoices, paying for items not received |
|
Definition
-Compare invoice to PO and receiving report
-Check math |
|
|
Term
| Fictitious vendors/suppliers |
|
Definition
-Approve new vendors
-Restrict access to vendor master file
-Document receipt of goods/services |
|
|
Term
| Accounts Payable posting errors |
|
Definition
-Data entry edit controls
-Reconcile AP subsidiary ledger detail to General Ledger |
|
|
Term
| Pay for items not received |
|
Definition
-Three way match or ERS
-Check signer reviews voucher package
-Receipts for all expense reports, petty cash, etc. |
|
|
Term
|
Definition
-Cancel voucher packages when paid
-Require voucher package for each check
-Pay only original invoices
-Application software checks for duplicates |
|
|
Term
|
Definition
-Pre-numbered, secure check stock
-Secure check signing machine
-Access controls for EFT and online banking
-Do not let AP write checks
-Reconcile bank accounts—independent person
-Count cash on hand and reconcile |
|
|
Term
|
Definition
-Special inks and paper
-Positive Pay with banks |
|
|
Term
| Missing prompt payment discounts |
|
Definition
-Schedule payments on due dates
-Cash flow budget |
|
|
Term
|
Definition
| -Cash flow budget and monitoring |
|
|
Term
| Invalid or inaccurate master data |
|
Definition
-Restrict access-Segregation of Master File changes and recording
-Data entry and processing controls
-Review all master file changes |
|
|
Term
| Unauthorized disclosure of sensitive information |
|
Definition
| -Chapters 7&8: encryption, access controls, authorization controls |
|
|
Term
| Loss of destruction of data |
|
Definition
| -Chapters 7&8: disaster recovery plan, offsite backups, insurance |
|
|
Term
|
Definition
-Hire competent people and train them
-Performance reports to identify non-conformance |
|
|
Term
| Steps of Expenditure Cycle |
|
Definition
Ordering
Receiving
Validating Invoice
Cash Disbursement |
|
|
