EXPENDITURE CYCLE by MISYA FARHANA MOHD FAIZAL https://padlet.com/milanfarhan14/Bookmarks Group 5 A4AC1204D [ Elyana, Izzati, Misya, Amalina, Linda] en-us 2021-05-19 00:14:37 UTC 2021-05-19 02:59:00 UTC hello@padlet.com Overview milanfarhan14 https://padlet.com/milanfarhan14/Bookmarks/wish/1537972430
- Tracing the sequence of activities through the purchases processing and cash disbursements procedures by using the expenditure cycle conceptually. 
- Technology neutral are intended in the conceptual system.
- Main focus is on what needs to be done, not how it is accomplished.]]> 2021-05-19 01:21:46 UTC https://padlet.com/milanfarhan14/Bookmarks/wish/1537972430 Purchase Processing Procedures milanfarhan14 https://padlet.com/milanfarhan14/Bookmarks/wish/1537980402 - Identifying inventory needs, placing the order, receiving the inventory and recognizing the liability are tasks involved.
- Procedures apply to both manufacturing and retailing firms.
- The two business types major difference lies between the way purchases are authorized.

Monitoring Inventory Records
- Deplete the inventories by transferring raw materials into the production process and by selling finished goods to customers.
- A purchase requisition is prepared and sent when inventories drop to a predetermined reorder point.
- It is sent to the prepare purchase order (PO) function to initiate the purchase process.

Prepare Purchase Order
- The purchase order requisition received are sorted by the vendor if necessary.
A copy of the PO is sent to the vendor and AP for filling temporarily in the AP pending file.
- A blind copy is sent to the receive goods function where it is held till the inventories arrive.
- Another last copy is filed in the open/closed purchase order file.

Receive Goods
- The copies of the PO reside in temporary files in various departments when firms encounter a time lag.
- Goods arriving from the vendor are reconciled with the blind copy of the PO where it contains no price or quantity information about the products received.
- The blind copy is important to reduce the risk of missing shipments.
- After the completion of the physical count and inspection, the receiving clerk prepares a receiving report.
- One copy is safe to the storeroom for safekeeping.
- Another copy is filed in the open/close PO file to close out the PO.
- The third copy is sent to the set up account payable to file it in the AP pending file.
- Fourth copy is sent to inventory control for updating the inventory records.
- The last copy  is placed in the receiving report file.


]]> 2021-05-19 01:26:25 UTC https://padlet.com/milanfarhan14/Bookmarks/wish/1537980402 Conceptual System milanfarhan14 https://padlet.com/milanfarhan14/Bookmarks/wish/1537985374 2021-05-19 01:29:15 UTC https://padlet.com/milanfarhan14/Bookmarks/wish/1537985374 Vouchers Payable System milanfarhan14 https://padlet.com/milanfarhan14/Bookmarks/wish/1537994446 AP department uses cash disbursement vouchers and maintains a voucher register.

Post to General Ledger
- Receives a journal voucher from the AP department and an account summary from inventory control.
- Posts the data contained to the inventory and AP control accounts where it reconciles the inventory control account with the inventory subsidiary summary.
- It is then filed in the approves journal voucher file.

]]> 2021-05-19 01:34:27 UTC https://padlet.com/milanfarhan14/Bookmarks/wish/1537994446 Cash Disbursement System milanfarhan14 https://padlet.com/milanfarhan14/Bookmarks/wish/1538005015 - Process the payment of obligations created in the purchases system.
- One of the objective is to ensure that valid creditors receive payment and the amounts paid are timely and correct.

Identify Liabilities Due
- Begins in AP department where the clerks review the open AP file for items due for payment.
- To ensure debts are paid, the file is organized by payment due date.
- The clerk send payment approval in the form of AP packet to the cash disbursement department.]]> 2021-05-19 01:40:41 UTC https://padlet.com/milanfarhan14/Bookmarks/wish/1538005015 EXPENDITURE CYCLE RISKS AND INTERNAL CONTROL fatihahellyana https://padlet.com/milanfarhan14/Bookmarks/wish/1538075550 Objective
  • To mitigate the risk from errors and fraud
Risks and Controls 
1. Unauthorized inventory purchases
Physical Control
  • Transaction authorization - formal purchase requisition 
IT Control 
  • Automated purchase approval 

2. Receiving wrong items, incorrect quantities, or damaged goods
Physical Control
  • Independent verification-Receiving department reconciles receipt with PO 
  • Supervision in Receiving Department  
IT Control 
  • Scanner technology 

3. Inaccurate record keeping 
Physical Control
  • Transaction authorization - AP Department authorizes cash disbursements to make payment
  • Accounting records - audit trail documents, journals, accounts, and files 
  • Independent verification - inventory control, AP, cash disbursements and GL 
IT Control 
  • Input data edits 
  • Error Messages 
  • Automated posting to accounts
  • File backup 

4. Misappropriation of cash and inventory 
Physical Control
  • Supervision - receiving department 
  • Independent verification - three-way match 
  • Segregation of duties - cash disbursement, general ledger, AP function, warehouse, inventory records 
IT Control
  • Automated three-way match 
  • Multilevel security to provide segregation of duties 

5. Unauthorized access to accounting records and confidential reports
Physical Control
  • Access control - source documents, journals, ledgers
  • Segregation of duties - sub-ledger, GL, asset custody 
IT Control
  • Password control
  • Multilevel security to prevent unauthorized access to data
]]> 2021-05-19 02:24:19 UTC https://padlet.com/milanfarhan14/Bookmarks/wish/1538075550 REENGINERING USING EDI nurul01izzati https://padlet.com/milanfarhan14/Bookmarks/wish/1538123502 EDI TECHNOLOGY
->devised to expedite routine transaction processing between manufacturers, wholesalers, and retailers by connecting buyer and seller computers via a private network on the Internet.

KEY ELEMENT
->the implementation of a trading partner agreement to eliminate the discrepancies that require human involvement to resolve.

KEY FEATURES
1.       As inventory needs are detected, the system automatically sends a digital EDI purchase order to the vendor.
2.       When the goods arrive, receiving personnel perform only cursory inspection since quality and quantity are guaranteed by the trading partner agreement. 
3.       Because the financial information about purchases is known in advance from the trading partner agreement, the vendor’s invoice provides no critical information that cannot be derived from the receiving report. By eliminating this source of potential discrepancy.
4.       Payment is made automatically by EFT directly to the vendor’s bank account.

EDI CONTROL ISSUES
·         EDI poses unique risks for organizations that need to be recognized and controlled.
·         One of the risk is to ensure that in the absence of explicit authorization, only valid transactions are processed.
·         Another risk is that a trading partner, or someone masquerading as a trading partner, will access the firm’s accounting records in a way that is unauthorized by the trading partner agreement.

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