You are provided with the following information about the internal control system for materials acquisitions for the ABC Company Limited, a medium-sized company that builds special machinery to order.

Material purchase acquisitions are first approved by the plant manager, who then sends them to the Purchasing Department. A prenumbered purchase order is prepared in three copies by one of several department staff. The department staff account for all purchase order numbers. The original copy is sent to the vendor. The Receiving Department is sent the second copy to use for a receiving report. The third copy is kept on file in the Purchasing Department along with the requisition.

Delivered materials are immediately sent to the Storeroom. The receiving report, which is a copy of the purchase order, is sent to the Purchasing Department. A copy of the receiving report is sent to the Storeroom. Materials are issued to factory employees subsequent to a verbal request by one of the foremen.

When the mailroom clerk receives vendors’ invoices, he forwards them to the Purchasing Department staff who placed the order. The invoice is compared with the purchase order on file for price and terms by the staff. The invoice quantity is compared with the Receiving Department’s report. After checking footings, extensions, and discounts, the staff indicates approval for payment by initiating the invoice. The invoice is then forwarded to the Accounting Department. Vendor name, date, gross and net invoice amounts, and account distribution are key-entered into the computer system for updating the acquisitions journal and accounts payable master file, and filed by payment date due. The vendor’s invoice is filed in the Accounting Department. The purchase order and receiving report are filed in the Purchasing Department.

The Accounting Department requests prenumbered checks from the Cashier. They are manually prepared and then returned to the Cashier, who puts them through the check-signing machine. After accounting for the sequence of numbers, the Cashier sends the checks to the Accounting Department, where they are key entered for recording cash disbursements and updating accounts payable. The checks are placed in envelopes and sent to the mailroom. At the end of each month, a listing of the accounts payable master file is printed and the total is compared with the general ledger balance. Any differences disclosed are investigated.

Question:

List the most important internal control weaknesses for acquisitions and cash disbursements.