The following list presents statements regarding the expenditures processes. Each statement is separate and should be considered to be from a separate company. Determine whether each statement is an internal control strength or weakness; then describe why it is a strength or weakness. If it is an internal control weakness, provide a method or methods to improve the internal control.
- A purchasing agent updates the inventory subsidiary ledger when an order is placed.
- An employee in accounts payable maintains the accounts payable subsidiary ledger.
- Purchasing agents purchase items only if they have received an approved purchase requisition.
- The receiving dock employee counts and inspects goods and prepares a receiving document that is forwarded to accounts payable.
- The receiving dock employee compares the packing list with the goods received and if they match, forwards the packing list to accounts payable.
- An employee in accounts payable matches an invoice to a receiving report before approving a payment of the invoice.
- A check is prepared in the accounts payable department when the invoice is received.