Reference no: EM132956958

BC Berry Products Inc. processes various types of fresh berries over multiple plant locations. As a preliminary step in planning the engagement, the plant managers have been asked to provide a written description of their respective procedures for processing payment vouchers for parts and supplies.

The following are nine excerpts from one of the written descriptions.

• The head office purchasing department acts on purchase requisitions issued by the inventory stores department.
• Orders are placed on pre-numbered purchase order forms.
• A purchase order copy with all details of items ordered, quantities, and pricing is sent to the receiving and accounts payables department.
• When goods are received, the receiving department stamps "order received" on its purchase order copy and forwards the annotated order to the accounts payable department.
• Purchase orders, purchase order copies that have been annotated by the receiving department, and supplier invoices are matched by the accounts payable department.
• Clerical accuracy of supplier invoices is checked by the accounts payable department.
• A pre-numbered payment voucher is prepared and forwarded, along with supporting documentation, to the plant controller, who reviews and approves the voucher.
• Supporting documents are returned to the accounts payable department for filing and approved payment vouchers are forwarded to head office for payment.
• A report listing cheques issued by head office is received and promptly filed by the accounts payable department.
• You are the internal auditor for BC Berry Products, and you have been asked to evaluate the purchasing system.

Required

Problem 1: For each of the payment system procedures listed above, explain whether or not additional procedures should be implemented to improve the internal control. Justify your answers.