Question

Explain the implication (below) and provide a recommendation. To prepare this analysis, use the following table structure:

Weakness	Implication	Recommendation

Fixed asset cycle:

• Branch managers are able to order items as they see fit.

Answer 1

Sl.no	Weakness	Implication	Recommendation
1	Non having of formal purchases process	Unauthorized transaction for purchase of material	Formulate detailed delegation of authority for purchase of materials
2	Non having of formal purchases process	Unauthorized transaction for purchase of material	There should be division of responsibilities for acquisition of material. Like User request, Purchase order, Goods receipt note, Capitalization.
3	Non having of formal purchases process	Unauthorized payment	Maker and checker for payment in accounts department based on the delegation of authority