Problem 1: You are presented with 6 unique problems below that could have been p
ID: 3683652 • Letter: P
Question
Problem 1: You are presented with 6 unique problems below that could have been prevented, detected and/or corrected by using an appropriate control plan. Use the various control plans listed in your text (see pages listed below) to choose the BEST plan to handle each problem that is presented. In your answer, explain WHY you believe this is the best control plan to address this issue. When in doubt, it is always better to choose a preventive control plan rather than a detective/corrective control plan.
(a) Snerd’s new cash disbursements clerk, Sally, prepares payments in batches twice per week as payment due dates arrive. She has discovered a way to prepare one payment each week to herself by attaching a fake invoice that she creates on her local printer. Her friend, Kacie, the cashier, approves each batch, and the two enjoy a day of shopping each week at Snerd’s expense.
(b) Snerd Manufacturing works with a few vendors who provide good quality raw materials at a competitive price, but who are sometimes negligent in providing timely invoices to Snerd. Snerd has a policy of taking advantage of cash discounts whenever possible, but it hasn’t always gotten discounts since invoices are arriving too late to take advantage of the discounts.
(c) Receiving dock employees at Snerd have allowed a few inventory orders to be recorded and forwarded to the warehouse that were never ordered.
(d) Snerd Manufacturing buys fabric to make a variety of sportswear. It recently decided to try a new vendor for its cotton. When the cotton was used in production, workers noted that it was much more prone to tear on the machines than the previous cotton that had been used.
(e) Snerd Manufacturing buys fabric to make a variety of sportswear. On its most recent order to MaxedOut, it ordered 100 bolts of navy blue nylon. When the fabric arrived, 90 bolts were in the shipment, and receiving appropriately recorded the 90 as received. The other 10 appropriately remained on backorder at MaxedOut. MaxedOut sent an invoice for the entire order of 100 bolts, which was promptly approved and paid by Snerd.
(f) Ned works in the purchasing department as a buyer for Snerd Manufacturing. His friend, Moe, works at a supplier that does not currently do business with Snerd. Moe gets commissions on sales that he makes, so Ned has decided to get a percentage of Moe’s commissions by ordering inventory from Moe’s company that is not needed or used by Snerd.
Explanation / Answer
a) In this scenario there must be a preventive control plan that prevent sally in attaching the fake invoice.
b) In this scenario there must be corrective control plan that can correct the invoice sending time.
d) As the new cotton is more porne to tear , we need to change it by applying corrective control plan.
e) Here we need to apply prevention control plan , to prevent this types of instance again in future.
f) Here we need to apply the corrective control plan, as its best suited the conditions.