Big, Inc. Big is a major manufacturer of automobiles. This narrative describes t
ID: 2594819 • Letter: B
Question
Big, Inc.
Big is a major manufacturer of automobiles. This narrative describes the purchasing, accounts payable and cash disbursement process for original equipment windshields for its only supplier of windshields, Glass.
Bag’s inventory system requests the purchasing department to reorder windshields. When the PO is created a record is added to the PO file (all data is stored on magnetic disks) and an electronic transmission is sent to Glass. Glass acknowledges the order (also electronically).
Glass ships the order and sends an electronic invoice to Big. The electronic invoice data is recorded to a pending invoices file.
When the goods arrive at Big’s warehouse, a receiving clerk examines the goods and keys in the receiving data. The keying operation creates a receiving record on the receiving file and updates the PO record to reflect the receipt.
Each morning, the AP clerk accesses the pending invoices file to identify invoices for which there are receiving reports and POs. The computer matches the invoice data to the PO and receiving data and displays them to the clerk. If the data does not match the clerk follows up with Glass to resolve discrepancies. If the data matches, the clerk enters the date the invoice should be paid and an authorization code for the bank to transfer payment to Glass on that date. The payment authorization is encrypted and transmitted electronically to Big’s bank where it is stored until the payment date.
Complete the Control Matrix. Include at least 5 present controls and at least 2 missing controls . Be sure to label the column headers (3 pts). Additonally, identify at least 2 operations process effectiveness goals and add them to the bottom of the page as goal A and B.
Control Goals of the Operations Process
Control Goals of the Information Process
Ensure effectiveness of operations
Ensure Efficient of resources
Ensure security of resources
IV
IC
IA
UC
UA
Recommended control plans
A
B
C
Missing Controls:
Control Goal A
Control Goal B
Control Goals of the Operations Process
Control Goals of the Information Process
Ensure effectiveness of operations
Ensure Efficient of resources
Ensure security of resources
IV
IC
IA
UC
UA
Recommended control plans
A
B
C
Missing Controls:
Explanation / Answer
PRESENT CONTROLS
MISSING CONTROLS
PRESENT CONTROLS
MISSING CONTROLS
- AN ELECTRONIC RECORD IS KEPT OF PURCHASE ORDERS, THIS IS EFFECTIVE
- PURCHASE ORDER IS ACKNOWLEDGED. THIS IS EFFECTIVE
- PURCHASE ORDERS HAVE TO BE CHECKED TO SEE IF THEY ARE BEING FOLLOWED UP WITH GOODS RECEIPT. THIS IS NOT BEING DONE.
- IF GOODS ARE BEING DELAYED, THE REASON SHOULD BE COMMUNICATED TO BUYER ASAP
- ONLY ONCE THE GOODS ARE DELIVERED AN INVOICE SHOULD BE SENT
- GOODS RECEIVED NOTES ARE MATCHED WITH INVOICE. THIS IS EFFECTIVE AS PAYMENT SHOULD BE ONLY FOR SERVICES RENDERED
- IF THERE IS A MISMATCH THE AP CLERK QUERIES AND RESOLVES DISCREPANCIES
- ONCE THE MATCH IS AGREED PAYMENT IS AUTHORIZED
- A SUPERVISOR HAS TO CHECK BEFORE PAYMENT IS MADE AS PAYMENT SHOULD ONLY BE AUTHORISED BY A SENIOR APPROVED OFFICIAL
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