Bait ‘N Reel Superstore a Comprehensive Review on the Internal Control System of the Company
Bait ‘n Reel Superstore
A Comprehensive Review on the Internal Control System of the Company
Bait ‘n Reel Superstore is a fishing store located in the Mountain Region of Pennsylvania owned and managed by Jamie Roberts. The said store has several internal control issues which greatly affect the efficiency of the store’s system.
Purchase System
Transaction Authorization
The store doesn’t observe the separation of authorizing purchase and processing it. The purchasing department is the one who sees to it that the inventory levels of the items are well maintained. This practice can often times lead to over or under purchasing for the reason that the purchasing department doesn’t have the knowledge on the behaviour of the inventories.
It is advised that the Inventory Control Department is the one who authorizes the purchase by issuing a Purchase Requisition to the Purchasing Department.
Segragation of Duties
Bait ‘n Reel doesn’t have a Warehouse Department. The Inventory Control is also the one who has the physical custody of the inventories. The Inventory Control department can control the actual number of inventory so that the actual number of items reconciles with the written record kept in the journal.
Establishing a Warehouse Department can minimize, if not extinguish the issue of lost inventories. Separating the physical custody of goods from the written records can help the auditor detect the missing inventories.
Supervision
The store issues complete Purchase Orders to the Receiving department. Doing so doesn’t encourage the Receiving Department Manager to make an actual count and detailed inspection of the delivered items. He can just issue a Receiving Report that will tally with the Purchase Order so as not to burden himself form inspecting the items.
Issuing of Blind Purchase Orders leaves the manager no choice but to count the items. The correct number of items can then be recorded in the receiving report.
Access Controls
Goods are
A Comprehensive Review on the Internal Control System of the Company
Bait ‘n Reel Superstore is a fishing store located in the Mountain Region of Pennsylvania owned and managed by Jamie Roberts. The said store has several internal control issues which greatly affect the efficiency of the store’s system.
Purchase System
Transaction Authorization
The store doesn’t observe the separation of authorizing purchase and processing it. The purchasing department is the one who sees to it that the inventory levels of the items are well maintained. This practice can often times lead to over or under purchasing for the reason that the purchasing department doesn’t have the knowledge on the behaviour of the inventories.
It is advised that the Inventory Control Department is the one who authorizes the purchase by issuing a Purchase Requisition to the Purchasing Department.
Segragation of Duties
Bait ‘n Reel doesn’t have a Warehouse Department. The Inventory Control is also the one who has the physical custody of the inventories. The Inventory Control department can control the actual number of inventory so that the actual number of items reconciles with the written record kept in the journal.
Establishing a Warehouse Department can minimize, if not extinguish the issue of lost inventories. Separating the physical custody of goods from the written records can help the auditor detect the missing inventories.
Supervision
The store issues complete Purchase Orders to the Receiving department. Doing so doesn’t encourage the Receiving Department Manager to make an actual count and detailed inspection of the delivered items. He can just issue a Receiving Report that will tally with the Purchase Order so as not to burden himself form inspecting the items.
Issuing of Blind Purchase Orders leaves the manager no choice but to count the items. The correct number of items can then be recorded in the receiving report.
Access Controls
Goods are