Purchasing, Inventory, and Cash Disbursements

Glenn Helms, Ph.D., CPA, CISA, CIA, CFF, CITP, was the Arthur Young Fellow in IT Auditing at the University of Houston and has served as Director of Certification for the International Certified Information Systems Auditor program. He has served on numerous national and international academic and professional committees including the American Institute of Certified Public Accountant's Auditing Standards Board's Computer Auditing Subcommittee and its Specialized Accreditation Board. Dr. Helms has presented over 2,000 professional seminars throughout North and South America, Europe, and Asia. He has published over 60 articles in a wide range of practitioner and academic journals and has served on the editorial advisory boards of several national and international journals. His books address security, controls and fraud in a variety of environments.

Chapter 1 The Acquisitions Cycle: Ordering, Receiving, and Warehousing   1-1


The Acquisitions Cycle   1-2


Ordering  1-3


Receiving and Warehousing   1-7


Variations of the Typical Acquisitions Cycle   1-10


Manufacturing Environment   1-11


Retail Environment   1-12


Services  1-13


Smaller Entity  1-14


Internal Controls in the Ordering, Receiving, and Warehousing Processes  1-15


Errors, Fraud, and Controls   1-17


Control Matrix   1-20


Summary   1-23


Practice Questions   1-24


Chapter 2 Cash Disbursements Cycle   2-1


Cash Disbursements   2-2


Typical Cash Disbursements System  2-3


Internal Controls in the Example Retail System  2-10


Errors, Fraud, and Controls   2-12


Control Matrix   2-17


Services   2-18


Electronic Data Interchange (EDI) Overview   2-19


Cash Disbursements Fraud Statistics   2-20


Cash Disbursement Frauds Other Than Billing   2-22


Cash Register Disbursement Frauds and Theft of Cash on Hand  2-26


Summary   2-27


Practice Questions   2-28


Chapter 3 Payroll and Expense Reimbursement Cycles   3-1


Payroll System  3-3


Internal Controls in the Example Payroll System  3-9


Additional Payroll System Controls  3-11


Control Matrix   3-15


Other Compensation Methods   3-16


Other Payroll Compensation Issues   3-17


Summary   3-21


Chapter 4 External Auditing and Forensic Investigations: Conceptual and Procedural Differences   4-1


Overview   4-2


Differences Between External Audit and Forensic Procedures and Principles   4-4


Summary  4-9


Glossary


Index


Solutions


Chapter 1  Solutions 1


Chapter 2  Solutions 3


Chapter 3  Solutions 6


Chapter 4  Solutions 7