Question

Suppose you are developing an information system for a company. During the system analysis you find that a purchasing agent frequently orders materials from a supplier that he partially owns. Which internal control procedures would you suggest the company to implement in the system?

Answer 1

Ans: the measures or procedures to be implemented in the system is as follows:

1. The order should have multiple approval level in the organisation depending on the amount and sensitivity of the purchase.

2. The details of the interest and frequemcyfof orders should be reported on an continous basis.

3. Comparative of prices offered by the related entity and the market prevailing prices should be compared by a different department before placing the order.

4. The receiving department should be establishment to ensure quality and specifications meet the requirement.