Reference no: EM132731484

Ingenious Measurement Systems Inc. (IMS) is a Canadian public company that manufactures high-end measuring devices used primarily in the oil and natural gas industries. In 2013, it had sales of $100 million and earnings before income tax of $5 million. The company has a December 31 year end.

Ted Pollock, IMS's CEO, is a proponent of strong corporate governance. He has spent the last year strengthening IMS's internal control environment. He believes that organizations that demonstrate good corporate governance practices will be perceived favourably by the markets. Ted wants to make a presentation to IMS's audit committee supporting the position that throughout the year the company's internal controls functioned in accordance with the company's control objectives. Depending on the reaction of the audit committee, Ted would like to make the presentation an annual occurrence. IMS has hired your professional services firm to assist Ted in preparing the content of his presentation.

Your firm is currently assessing the purchasing process. Accordingly, IMS has provided you with relevant material and access to the company s resources. As part of the analysis of this process, IMS has asked you to:

Problem 1. identify the existing key internal controls within the purchasing process,

Problem 2. describe the procedures that IMS could use to test the controls, and

Problem 3. identify the internal control weaknesses within the purchasing process and recommend improvements.