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ARCHITECT’S DEPOT (NETWORKED COMPUTER SYSTEM WITH MANUAL PROCEDURES) THE EXPENDITURE CYCLE PART 1 CASE STUDY Architect’s Depot (AD) is an online company that supplies a range of architectural products to building contractors and private individuals. Its product line includes items such as gable vents, shutters, vinyl sidings, and decorative trim in various materials. The company employs a combination of manual procedures and a networked accounting system with distributed terminals in several departments. After years of satisfactory performance, however, AD is now experiencing operational inefficiencies and accounting errors. Your firm has been hired to evaluate AD’s business processes and internal controls. AD’s expenditure cycle is described in the following paragraphs. Cash Disbursements Procedures The Cash Disbursements clerk, upon receipt of the AP journal voucher with supporting documents, prepares the check voucher in two copies and the check based on the payment due dates using the Check Disbursement System. The check is forwarded to the designated signatories who are members of the board of directors for signature. Signed checks are then mailed to the vendors. The Check Disbursement System is a partially automated system whereby after the processing of the check and the check voucher, the corresponding entries readily get posted to the General Ledger. The Check Disbursement clerk files the original check voucher and the supporting documents in a file maintained based on vendors’ name. The duplicate copy of the check voucher is filed based on the serial number of the check voucher. REQUIREMENTS: Create a system flowchart of the existing system under the Cash Disbursement Procedure and identify each department. Use the right symbols in making a flowchart.

ARCHITECT’S DEPOT (NETWORKED COMPUTER SYSTEM WITH MANUAL PROCEDURES)
THE EXPENDITURE CYCLE PART 1 CASE STUDY

Architect’s Depot (AD) is an online company that supplies a range of architectural products to building contractors and private individuals. Its product line includes items such as gable vents, shutters, vinyl sidings, and decorative trim in various materials.
The company employs a combination of manual procedures and a networked accounting system with distributed terminals in several departments. After years of satisfactory performance, however, AD is now experiencing operational inefficiencies and accounting errors. Your firm has been hired to evaluate AD’s business processes and internal controls. AD’s expenditure cycle is described in the following paragraphs.

Cash Disbursements Procedures
The Cash Disbursements clerk, upon receipt of the AP journal voucher with supporting documents, prepares the check voucher in two copies and the check based on the payment due dates using the Check Disbursement System.
The check is forwarded to the designated signatories who are members of the board of directors for signature.
Signed checks are then mailed to the vendors.
The Check Disbursement System is a partially automated system whereby after the processing of the check and the check voucher, the corresponding entries readily get posted to the General Ledger.
The Check Disbursement clerk files the original check voucher and the supporting documents in a file maintained based on vendors’ name. The duplicate copy of the check voucher is filed based on the serial number of the check voucher.

REQUIREMENTS:
Create a system flowchart of the existing system under the Cash Disbursement Procedure and identify each department. Use the right symbols in making a flowchart.

Added by Crystal L.

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