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Finance & Accounting
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Freeze-Time Flowchart Purchasing Process: First of all, Freeze-Time uses low-end accounting software package to prepare documents and reports. When employees need to purchase supplies, they inform either Benita or Rosa, who will give the employee a note. Then Benita or Rosa enters the order information into the accounting system and a purchase order is created.


A copy of the purchase order is used to authenticate this process. Once the goods have been given the green light, Benita or Rosa will enter the new inventory into the computer system. Payment Process: Rosa is in charge of paying the bills on fortnightly basis. She has to check the computer system for outstanding invoices and checks that the goods entered into the computer have actually been received. If any information has not been entered into the computer, then Rosa does this and prints the checks from the accounting system. Freeze-Time then mails checks and remittance invoices to the supplier. Occasionally, portions of the vendor bill will be returned to the company. Possible Internal Control Weaknesses For the purchasing flowchart, there are not really any internal control weaknesses that stand out except for the fact that Benita Goldberg and her mother Rosa control the whole process. There is nothing to suggest that any collusion is going on, but the flexibility in their roles (they take turns at different points in the process) and lack of accountability mean that the opportunity is there for them to engage in unethical conduct. To prevent any possible conspiracy from occurring, an outsider could be brought in to oversee the whole process. ...
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