AUE2602 ASSIGNMENT 5A SEMESTER 2 FOR 2023
This document consists of Answers for AUE2602 Assignment 5A. Please do not plagiarise (Copy and paste) this document. Only use it as a guide to make up your own answers.
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This document consists of Answers for AUE2602 Assignment 5A. Please
do not plagiarise (Copy and paste) this document. Only use it as a guide
to make up your own answers.
, Question 1.1 - Make recommendations to management on the
internal controls that could be implemented to mitigate the
weaknesses that you identified.
Weaknesses Internal Control
1. Ordering Implement a robust inventory management system that
incorrect or tracks inventory levels and generates automatic reorder
unnecessary points based on historical sales data and lead times.
goods Establish a formal approval process for all purchase orders,
requiring authorization from a designated manager or
department head.
Conduct regular reviews of inventory levels to identify slow-
moving or obsolete items and take appropriate action, such
as liquidation or disposal.
Implement a vendor evaluation process to assess the
reliability and quality of suppliers, ensuring that only
reputable and reliable suppliers are used.
Implement a budgeting system that sets limits on the amount
and types of goods that can be ordered, preventing
excessive or unnecessary purchases.
Provide training and guidance to employees involved in the
ordering process to ensure they understand the importance
of accurate and necessary ordering.
2. Ordering Implement a segregation of duties by assigning different
unauthorised individuals to initiate, approve, and receive goods, reducing
goods the risk of collusion.
Establish a formal vendor approval process, requiring
thorough background checks and verification of vendor
credentials before engaging in business transactions.
Implement a system of purchase order matching, where the
goods received are compared to the original purchase order
to ensure accuracy and prevent unauthorized substitutions.
Conduct periodic audits of purchase orders and vendor
invoices to detect any discrepancies or irregularities.
Implement a whistleblower hotline or reporting mechanism to
encourage employees to report any suspicions or concerns
regarding unauthorized ordering.
3. Acquisition of Implement a vendor evaluation process that includes quality
inferior quality assessments and performance reviews to ensure that only
goods suppliers with a track record of delivering high-quality goods
are selected.
Conduct regular inspections and quality checks on incoming
goods to identify any defects or substandard items before
they are accepted into inventory.
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