Chapter 12 The Purchasing Process 05 08 2013 Purchase requisition Request for quotation services Sent by inventory control to the purchasing department that says who the person is and what they re buying Internal request to acquire goods and services Invite suppliers into bidding process to bid on specific products or Receiving report acceptance report Receiving document such as PO that tells the quantity received that is used to record merchandise receipts goods Acceptance documents services received to formally acknowledge the satisfactory completion of a service contract Accompanies the purchase inventory from the vendor and identifies Packing slip the shipment Definition of services Work performed by outside vendors including contractors catering firms towel and linen service providers consultants auditors What are the information flows of the purchasing process 1 purchase requisition sent from inventory control to purchasing 2 PO sent to vendor inventory control receiving and accounts payable 3 packing slip with goods received from vendor 4 stock notice with goods sent to warehouse 5 notice of goods receipt sent to accounts payable general ledger and purchasing What triggers the receive goods and services part of the purchasing process Vendor packing slip What are the outputs of the purchasing process Purchase order Purchase order inventory notification sent to the inventory system Receiving report NOT VENDOR INVOICE Who authorizes the purchase requisition Requisitioning department supervisor Inventory reorder point techniques ABC analysis technique for ranking items in a group based on the output of the items can be used to categorize inventory items Reorder point analysis ROP each item is assignment a reorder EOQ models order quantity based on costs of ordering and carrying according to their importance point based on its sales rate inventory Control plan Blind copy of PO to receiving a copy of a document on which certain data is blanked out so that persons receiving that copy will not have access to those data Corporate codes of conduct address what Issues related to the purchasing function such as kickbacks bribes conflicts of interest and the like Benefits of supply chain management Lower costs to customer Higher availability of product Higher response to customer requests Reduced inventories along supply chain Improved buyer seller relationships Smooth shipping and receiving Reduced item cost Reduced product defects Increased customer orders Potential problems with supply chain management Data not collected or not shared across functional boundaries Information is not shared between supply chain partners Inaccurate data negatively affects the entire chain Over reliance on demand forecasting that may be inaccurate Competing marketing and sales objectives can lead to unrealistic forecasts Chapter 13 The AP CD Process 05 08 2013 Three way matches Purchase order Receiving document Vendor invoice Bubbles in the logical DFD include Establish payable Make payment In the AP CD process establish payable is triggered by what Receipt of vendor invoice In the AP CD process make payment is triggered by what AP master data payment due date information The vendor invoice is sent by the vendor to which process Establish payable The data flows of the AP CD process include what Invoice received from vendor Accounts payable invoice notice sent to general ledger Approved voucher payment request sent to cashier and general Payment sent to vendor by cashier paid voucher returned to accounts payable department payment notice sent to the general ledger ledger Who authorizes payments Accounts payable department THE TREASURER What payments are not typically supported by an invoice Rent Freight Payroll Payroll taxes Corporate income taxes Security investments Repayment of debt obligations and interest E payments are settled through ACH network wire transfer or debit credit cards AP What are the common forms of fraud abuses in the AP CD process o Bogus vendors segregation of duties compare vendor data to employee records o Embezzle vendor refunds segregation of duties CD o Check forgery segregation of duties o Fraudulent wire transfers firewalls anti virus software What are the control plans for the AP CD process Independent validation of vendor invoices Match invoice purchase order and receiving report Reconcile bank account Independent authorization to make payment What control plans of the AP CD process address the goal of input completeness Tickler file of payments due Agreement of run to run totals reconcile input output batch totals Digital signatures The availability of cheap color printers has caused an escalation in check forgery cash disbursements fraud ERP systems facilitate the AP CD process by linking The purchase order The receiving report The invoice The cash disbursement Chapter 14 The HR Management and Payroll Process 05 08 2013 Human capital management manages how people are hired trained assignment motivated and retained What do HR self service systems allow employees to do Systems that allow employees to access personal as well as business related information and functions What data is maintained in the skills inventory data The skills inventory data catalogs each employee s set of relative skills What events are performed by the HR management process HR management is the interacting structure of people equipment activities and controls that support repetitive work routines and decision needs of HR department managers What are the benefits of including HR data within the enterprise system Allows for sharing of common data providing benefits o Creating a single source for obtaining HR information o Providing for faster data access o Minimizing data redundancy o Ensuring data integrity and consistency o Facilitating data maintenance o Improving data accuracy What data store is updated when employees obtain new training Skills inventory data What is the data flow that goes to the insurance companies Payroll contribution notice Payroll reports may be provided to the following For proper segregation of duties a company should segregate the Unions Employees Government following duties HR Payroll AP Cashier Job time records provide information for distributing labor charges to jobs departments or other accounts Ghost employees is an example of a payroll related fraud involving non existent employees Expense reimbursement fraud includes Overstating expenses Submitting false receipts
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