The course text presents a scenario in which an accounts payable clerk needs to
ID: 3866224 • Letter: T
Question
The course text presents a scenario in which an accounts payable clerk needs to write checks to pay suppliers for the products sold. Based on this information:
Identify and describe the integrity controls that should be implemented to ensure that checks are written only to valid suppliers, for the correct amounts, and with proper authorization.
How will you design integrity controls for payment checks that require different levels of authorization? For example, each accounts payable clerk is authorized to write checks for some departments only, and checks with values over $10,000 require a second signature.
Write a 1-to 2-page report that identifies and describes the integrity controls that you will implement and how they will ensure that the listed requirements are met. The report should also describe how the controls will support different levels of authorization. Your report should conform to APA style.
Explanation / Answer
Identify and describe the integrity controls that should be implemented to ensure that checks are written only to valid suppliers, for the correct amounts, and with proper authorization.
We aim to minimize the errors and fraud opportunity so that the system is less vulnerable.
Integrity controls would include:
1. Only those names can be filled in the payee field on a check whose names are already existing in the system, condition applied that these are the approved and past existing users.
2.Payable to suppliers should be entered if and only if they are related to a purchase done and this purchase should be confirmed by the manager. All the details should be tracked.
3. Amount once entered can’t be changed and should auto populate from the invoice purchase of the product sold.
4. All invoice should be manager approved. Un-approved invoices stands cancelled.
5. The employee details of all the employees involved in a transaction from initial stage till check paid should be tracked and all the login/logout details timestamps should be recorded.
6. Once the check is printed for a set of invoices. It goes to the signing authority person. He should review all the audit trails and ensure all information supplied is correct. This signing authority person should come into role at last and should not be involved anyhow for previous transactions.
7. Once signing authority approves and signs the check it should be securely mailed to the recipients.
How will you design integrity controls for payment checks that require different levels of authorization? For example, each accounts payable clerk is authorized to write checks for some departments only, and checks with values over $10,000 require a second signature.
Implement all above controls with the below mentioned points:
1. A amount should be marked(say $1000), based on the invoice if a check contains amount greater than the set amount, the system will automatically pop up for multiple authorization which would be a mandatory condition for all amounts above that marked amount.
2. Top down approach should be used for authorization, that is, all unauthorized checks should be viewable by the highest level of authority related to issuance of check, once he approves them the check moves down the hierarchy.
3. Employees/Managers can view invoices related to their departments only.
4. Once the check is prepared it goes for manager’s approval.
5. Manager will make sure that all invoices are approved and will monitor all the logs and track the authorized purchaser. The signing manager should access all information related to the purchase and confirm that the product was received.
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