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Area of study: ACCA, Accounting Information System

Carberry Manufacturing is a newly formed company with its head office on St. Lucia Avenue in New Kingston. Its factory is located in Old Harbour, St. Catherine. The company manufactures a line of natural juices and started operations one year ago. It currently employs 120 line staff and runs three 8-hour shifts. Each shift is supervised by one operation supervisor and Mr. John Carberry, son of the company's Executive Director, oversees the operations of the plant. His office is in New Kingston. The inventory information required for production is maintained on a computer in the warehouse next to the factory. The server is located in New Kingston and data entry and inventory control is managed by Paul Gordon. His father is one of the operation supervisors and he has been with the company since its inception. Paul is an IT graduate from UTech and has some knowledge of accounting. He is responsible for the warehouse and has two warehouse clerks reporting to him. When raw materials fall below the re-order level Paul will place orders with the farmers within a 10-mile radius of the factory. He sends a copy of the purchase order to Ms. Janet Carberry and retains a copy for himself. When the goods are delivered he oversees the receival process only to ensure that the quality of the produce is satisfactory. The raw material is placed in the warehouse and the delivery slip is used to update the inventory database. He notifies the head office via email that the materials arrived and payment can be processed. The invoice is sent by the suppliers directly to the head office for payment. Janet posts the invoices to the system and files the invoice and her copy of the purchase order. At the end of the week, the cheques are prepared and signed by Ms. Carberry and her brother John. Ms. Janet Carberry is the person responsible for preparing cheques at the head office. Once signed, the cheques are recorded in a register by Francine, a part-time student from UTech and calls made to the suppliers to collect their cheques. Someone collects the cheque stubs from Francine and use them to post the information to the General Ledger. Every Friday, Paul sends a print of the inventory valuation report to Mr. Carberry to advise him of the status at the raw material inventory at the factory. Paul hardly conducts any stock counts, but periodically he will ask the warehouse clerks to assist him in checking a few items which he will match against his report. Once a month, he sends an Excel sheet to the head office with the information from the documents processed at the warehouse for posting to the General Ledger. Required Analyze the internal control weaknesses in the system. Model your responses according to the six categeries of physical control activities specified in SAS 78. Carberry Manufacturing is a newly formed company with its head office on St. Lucia Avenue in New Kingston. Its factory is located in Old Harbour, St. Catherine. The company manufactures a line of natural juices and started operations one year ago. It currently employs 120 line staff and runs three 8-hour shifts. Each shift is supervised by one operation supervisor and Mr. John Carberry, son of the company's Executive Director, oversees the operations of the plant. His office is in New Kingston. The inventory information required for production is maintained on a computer in the warehouse next to the factory. The server is located in New Kingston and data entry and inventory control is managed by Paul Gordon. His father is one of the operation supervisors and he has been with the company since its inception. Paul is an IT graduate from UTech and has some knowledge of accounting. He is responsible for the warehouse and has two warehouse clerks reporting to him. When raw materials fall below the re-order level Paul will place orders with the farmers within a 10-mile radius of the factory. He sends a copy of the purchase order to Ms. Janet Carberry and retains a copy for himself. When the goods are delivered he oversees the receival process only to ensure that the quality of the produce is satisfactory. The raw material is placed in the warehouse and the delivery slip is used to update the inventory database. He notifies the head office via email that the materials arrived and payment can be processed. The invoice is sent by the suppliers directly to the head office for payment. Janet posts the invoices to the system and files the invoice and her copy of the purchase order. At the end of the week, the cheques are prepared and signed by Ms. Carberry and her brother John. Ms. Janet Carberry is the person responsible for preparing cheques at the head office. Once signed, the cheques are recorded in a register by Francine, a part-time student from UTech and calls made to the suppliers to collect their cheques. Someone collects the cheque stubs from Francine and use them to post the information to the General Ledger. Every Friday, Paul sends a print of the inventory valuation report to Mr. Carberry to advise him of the status at the raw material inventory at the factory. Paul hardly conducts any stock counts, but periodically he will ask the warehouse clerks to assist him in checking a few items which he will match against his report. Once a month, he sends an Excel sheet to the head office with the information from the documents processed at the warehouse for posting to the General Ledger. Required Analyze the internal control weaknesses in the system. Model your responses according to the six categeries of physical control activities specified in SAS 78

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