BU547 Lecture Notes - Lecture 11: Internal Control, Chief Operating Officer, Accounts Receivable
Document Summary
Inventory is counted on an annual basis rather than perpetually with multiple check-ups throughout the year. Seymour does not issue purchase orders when dealing with long-term supplier. Notes regarding the purchases are recorded in his own notebook that he updates when he is notified of the arrival of the goods. The warehouse is open five days a week, from. 7am to 6pm where all employees have access to the warehouse while the loading dock is also open all day. The packing slips are signed and match only when purchase orders are available. A verbal notification is delivered when no purchase order is present. With the rapid growth of the company, counting inventory on an annual basis creates room for fraud to be committed when inventory is not confirmed regularly. This allows room for mis recording of accounts payable as there are not a system in place to confirm orders received are orders placed.
