Question 1:
Your senior has asked you to carry out an internal control review of the purchasing department of a
manufacturing company. What control procedures would you expect in the following functions of the
department:
• Ordering of goods
• Receipt of goods
Your senior has asked you to carry out an internal control review of the purchasing department of a
manufacturing company. What control procedures would you expect in the following functions of the
department:
• Ordering of goods
• Receipt of goods
Answer:
Ordering of Goods
• Need assessment
• Proper Request from concerned department which needs these goods
• Approval of the request from Requesting department head
• Inviting Quotations from vendors (usually from authorized vendors)
• Quotation with competitive rates & best quality product is selected
• Proper Purchase Order is prepared stating terms & conditions of purchase
• Approval of Purchase order from Purchasing Department head
Receipt of Goods
• Gate Pass is prepared
• Quality of goods is checked as per PO
• Quantity of Goods is checked as per PO
• Goods are entered in Store
• Goods are entered in stock ledger
• Check the bill is as per goods received
• Forward the Bill to Accounts Payable
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