Reference no: EM133141623

Question - As part of the internal audit team, you are assigned to focus on the process review of the purchasing activity. During your audit, you have documented that the authorization of the purchases will depend on specific categories. Those small purchases up to P50,000 can be approved by the Purchasing Manager and those very significant purchases like capital expenditures need the approval of the higher-level personnel. As you perform tests for their internal control, you discovered that the majority of the purchases are being bought or ordered to one company only whose Sales representative is related to the Purchasing Manager. How will you respond to this kind of scenario?