Question

1. The Feniasse Almeida Group, if selling sports equipment, will soon open Accounting departments, use an integrated computer system to capture and registration of transactions, through the batch system. The company's management wants a good system of internal control over the term purchases that the company is going to make. Warehouses Limited, dedicates your warehouse for the first time. Purchasing, warehousing and It is intended that the student describes fifteen (15) internal control procedures for term purchases that he will recommend to implement in the company. (120 points)

2. The ABD General Manager, SARL, is concerned with the level of control that exists to provide security to the computer system used in the company and which is being supervised by the company's Financial Director who does not understand anything about computers .

The following is a brief description of the company's existing system: The computer room, which is air-conditioned, has a single entrance, is located on the corner of the central office and any employee who wants to work on the system can use the computers or even have access to the network and computer archives from any sector of the company that has a computer.

Due to these facilities many employees have access to the computer system. In the company there is a universal password known to everyone and the system works online. It is intended that the student Identify five (5) deficiencies that exist to provide security to the computer system and propose suggestions to improve the deficiencies found. (120 points)

Answer 1

1. Internal control procedure on purchase

1. Segregation of duties: Duties of employees should be segregated relating to purchase transactions. For example person who approve purchases should be different from person who order for purchase and person who receives material should be different.
2. Authorisation procedure: For purchase of inventory authorisation procedure should be adopted to purchase, before placing order an authorisation should be obtained.
3. Inventory counting should be adopted to reconcile inventory with delivery challan and invoice.
4. Surprise check: Surprise checking of inventory should be made by employee who is not related to purchasing department.
5. Access restrictions of inventory: Only limited person should access of inventory.
6. Goods should be stored at secured place.
7. Appropriate checks should be placed in to system to place controls on inventory, ie overstocks and short of inventory.
8. Company should implement purchase order system to place order.
9. Choose vendors based on their price, quality, credit terms.
10. Company accounting software should provide report relating to slow moving and fast moving goods.
11. Payment to creditors should be approved through system. And should be approved by authorized person.
12. Rotation of employees: Employees who is recruited for specific task or job should be rotate after certain time.
13. To avoid collusion among employees there should be proper and appropriate communication between employee and management.
14. Company should use mechanical devices to read bar code by way of scanner to restrict theft of items and also place cctv cameras and fire fighting equipments.
15. Payment should be paid and accept through bank only.
16. Company should adopt inventory management system.
17. Accounting system should be protected from unauthorized access.
18. There should be login procedure for entering system.
19. Automatic logout if system is inactive for certain time
20. Duplicate entry should be restricted in to system.

2. Deficiencies in to existing computer system

1. There is no limited access to computer room.
2. No password policy is adopted by company
3. No emergency existence in place
4. No separate Computer room.
5. There is no computer network access restrictions.
6. No authorisation procedure followed to enter in to system.

Suggestions to improve deficiencies

1. Access to computers should be restricted. Only authorized persons can enter into room. Entry register should be placed outside the room. Biometric device should be placed for entering into room.
2. Password should not be same. Strong password be used. Password should be changed after certain time intervals.
3. In case any natural calamities, there should be emergency existence.
4. Computer room should be at separate location from its working office.
5. There should be access restrictions on computer network. Only authorized person can access network by way of login id and password. Password should be blocked upon unsuccessful 3 attempts of entering password.
6. To entering into computer system person should be authorized.