Threats and Controls in the Expenditure Cycle
Accounting Information system
There are four activities in revenue cycle namely; sales order entry, shipping, billing and cash collection. The table below shows the activities and the related actions to be conducted by company employees:- Revenue cycle activities | Activity | Sales Order Entry | Process orders from customers | Shipping | Deliver merchandise or services to customers (outbound logistics) | Billing | Send invoices to customers | Cash Collections | Process payments from customers |
PBL Session 2 Question b:
In expenditure cycle, the four activities conducted are ordering materials, supplies, and services, receiving materials, supplies, and services, processing invoices and cash disbursements. The table below shows the activities and the related actions to be conducted by company employees:- Expenditure cycle activities | Activity | Ordering Materials, Supplies, and Services | Send orders to supplier | Receiving Materials, Supplies, and Services | Receive merchandise or services from suppliers (inbound logistics) | Processing Invoices | Review and approve invoices from suppliers | Cash Disbursements | Process payments to suppliers |
PBL Session 2 Question c:
All expenditure cycle activities depend on the integrated database that contains information about suppliers, inventory, and purchasing activities. There are several general threats and controls that may be experienced by Proterm Automobile Industries Sdn Bhd in its expenditure cycle.
The first general threat is inaccurate or invalid master data. When errors occur in the supplier master data, there is a tendency that the employees of Proterm Automobile Sdn Bhd may order goods from unapproved suppliers, purchase inferior quality materials, schedule for untimely deliveries, send payments to wrong address and fraudulent disbursements to fictitious suppliers. Errors in the inventory master data may lead to unexpected shortages of primary materials that
There are four activities in revenue cycle namely; sales order entry, shipping, billing and cash collection. The table below shows the activities and the related actions to be conducted by company employees:- Revenue cycle activities | Activity | Sales Order Entry | Process orders from customers | Shipping | Deliver merchandise or services to customers (outbound logistics) | Billing | Send invoices to customers | Cash Collections | Process payments from customers |
PBL Session 2 Question b:
In expenditure cycle, the four activities conducted are ordering materials, supplies, and services, receiving materials, supplies, and services, processing invoices and cash disbursements. The table below shows the activities and the related actions to be conducted by company employees:- Expenditure cycle activities | Activity | Ordering Materials, Supplies, and Services | Send orders to supplier | Receiving Materials, Supplies, and Services | Receive merchandise or services from suppliers (inbound logistics) | Processing Invoices | Review and approve invoices from suppliers | Cash Disbursements | Process payments to suppliers |
PBL Session 2 Question c:
All expenditure cycle activities depend on the integrated database that contains information about suppliers, inventory, and purchasing activities. There are several general threats and controls that may be experienced by Proterm Automobile Industries Sdn Bhd in its expenditure cycle.
The first general threat is inaccurate or invalid master data. When errors occur in the supplier master data, there is a tendency that the employees of Proterm Automobile Sdn Bhd may order goods from unapproved suppliers, purchase inferior quality materials, schedule for untimely deliveries, send payments to wrong address and fraudulent disbursements to fictitious suppliers. Errors in the inventory master data may lead to unexpected shortages of primary materials that