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Internal control system is a pivotal part of corporate governance. Assuming you are the manager of...

Internal control system is a pivotal part of corporate governance. Assuming you are the manager of purchasing department, design a comprehensive set of procedures that helps prevent staffs from making personal gains from their positions.

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Answer #1

Internal control system for purchasing department:

To prevent staffs from making personal gains from their positions,we have to ensure proper separations of duties,assign related buying functions to different people.With proper segregation,no single staff has complete control over all buying activities.We should have different people for;

a)Approve Purchase;

b)Receive ordered materials;

c)Approve invoices for payment;

d)Review and reconcile financial records;

e)Perform Inventory Counts

We should also timely review supplier's invoices,packing slips and purchase orders.Check accuracy of the information for prior payment,quantity ordered and price charged.

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