The Soap Manufacturing Company has three employees who work in the warehouse.All of the warehouse workers are authorized to order inventory when it falls below the reorder level.The workers complete a purchase order and mail it to the supplier of their choice.The inventory is delivered directly to the warehouse.The workers send a memo to accounts payable reporting the receipt of inventory.

Accounts payable compares the warehouse memo to the supplier's invoice.Accounts payable prepares a check which the treasurer signs.
Discuss potential internal control risks inherent in this system.

Question

The Soap Manufacturing Company has three employees who work in the warehouse.All of the warehouse workers are authorized to order inventory when it falls below the reorder level.The workers complete a purchase order and mail it to the supplier of their choice.The inventory is delivered directly to the warehouse.The workers send a memo to accounts payable reporting the receipt of inventory.
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Accounts payable compares the warehouse memo to the supplier's invoice.Accounts payable prepares a check which the treasurer signs.
Discuss potential internal control risks inherent in this system.

Quizplus · Accepted Answer

The Answer of The Soap Manufacturing Company has three employees who work in the warehouse.All of the warehouse workers are authorized to order inventory when it falls below the reorder level.The workers complete a purchase order and mail it to the supplier of their choice.The inventory is delivered directly to the warehouse.The workers send a memo to accounts payable reporting the receipt of inventory.
​
Accounts payable compares the warehouse memo to the supplier's invoice.Accounts payable prepares a check which the treasurer signs.
Discuss potential internal control risks inherent in this system.

The Soap Manufacturing Company Has Three Employees Who Work in the Warehouse.All