What is expenditure cycle controls?
The expenditure cycle is the set of activities related to the acquisition of and payment for goods and services. These activities include the determination of what needs to be purchased, purchasing activities, the receipt of goods, and payments to suppliers.
What are the four main processes in the expenditure cycle?
SUMMARY OF MATERIAL COVERED The basic business activities and data processing operations that are performed in the expenditure cycle, including: (1) ordering goods, supplies, and services; (2) receiving and storing them; and (3) approving invoices and paying for them.
What are the weaknesses of expenditure cycle?
As for the EC system, the possible weaknesses are segregation of duties of the Receiving, Purchasing & Inventory Control staff, incompleteness of EC documentation (Purchase Requisition, Purchase Order, Receiving Report), the inappropriate acknowledgement method for receipt of delivered goods, no written management …
What is the example of expenditure cycle?
Your expenditure cycle would be creating purchase orders from various employee requests for more paper, pencils and print cartridges, and calling the office supply store to place the order using the purchase order. Once the items were delivered, accounting would approve the invoice for payment and cut the check.
What are the accounts affected by the expenditure cycle?
Expenditure cycle affects financial statement accounts. It impacts all current assets, except marketable securities and accounts recievable, all plant and intangible assets and many current liabilities.
What are the repetitive process of expenditure cycle controls?
An expenditure cycle is a set of purchasing decisions and actions. It’s the repetitive process of creating purchase orders and ordering goods and services, receiving these items, approving the invoices for these items and services, and paying the invoices.
What are the internal control weaknesses?
There are four major internal control weaknesses that put your data at risk:
- Technical control weaknesses.
- Operational control weaknesses.
- Administrative control weakness.
- Architectural control weaknesses.
What is internal control strength?
Strengths of Internal Control Controls risk. Operates effectively and efficiently. Protects tangible and intangible resources from waste and theft. Prevents fraud. Proactively identifies potential issues and reactively deals with them quickly when they occur.
What are the accounts affected when performing tests of controls in the expenditure disbursement cycle?
Which of the following controls would be used to mitigate the threat of kickbacks?
Which of the following controls could be used to mitigate the threat of kickbacks? Job rotation and mandatory vacations.
What are control threats?
A control or countermeasure is a means to counter threats. Harm occurs when a threat is realized against a vulnerability. To protect against harm, then, we can neutralize the threat, close the vulnerability, or both.
What is control and weakness in internal control?
Internal control ensures that all your business processes meet those expectations. However, it’s critical that you identify the internal control weaknesses in your systems. An internal control weakness is a failure in the implementation or effectiveness of your internal controls.