Question

Explain the implication and provide a recommendation.

To prepare this analysis, she asked you to use the following table structure: Weakness Implication Recommendation

Fixed asset cycle:

• The accounts payable clerk determines in which account to record capital asset purchases.

Answer 1

Weakness : Because of present process it become subjective to the accounts payble clerk to choose which account it should be credited in. It makes it prone to mistakes errors and potential frauds.

Implication: there can be situation due to the which an error can occur into the books of accounts, Wrong amount can be credited into some wrong account.

Recommendation: the process can be automated and remove human intervention through reporting based on invoices and the account number mentioned there in. additionally the company can assign a unique id to each vendor and which shall be mentioned on the purchased order initiated, so that become easier for the clerk to assign the respective amounts.