ACCOUNTING INFORMATION SYSTEMS

CHAPTER 7

THE EXPENDITURE CYCLE

LEARNING OBJECTIVES

• Describe the basic business activities in the expenditure cycle

• Discuss key decisions that need to be made

• Discuss risks and the controls that can be used to mitigate those risks
CONTENT

1. Expenditure cycle definition

2. Basic business activities in the expenditure cycle

3. Risks & controls

EXPENDITURE CYCLE DEFINITION

A recurring set of business activities

and related data processing
operations associated with the
purchase of and payment for goods
and services.
PRIMARY OBJECTIVES OF EXPENDITURE CYCLE

Key decisions need to make:

Operation objectives: • What is the optimal level of inventory and supplies to carry?
Minimize the total cost • Which suppliers provide the best quality and service at the best
prices?
of acquiring and • How can the organization consolidate purchases across units to
maintaining inventories obtain optimal prices?
• How can information technology (IT) be used to improve both the
efficiency and accuracy of the inbound logistics function?
• How can the organization maintain sufficient cash to take advantage
of any discounts suppliers offer?
• How can payments to vendors be managed to maximize cash flow?
CONTEXT DIAGRAM OF EXPENDITURE CYCLE
FOUR BASIC EXPENDITURE CYCLE ACTIVITIES

Cash
Receiving disbursement
Approve
Ordering supplier
invoices
ORDERING
DETERMINE WHAT TO ORDER
APPROACH TO MANAGE INVENTORY

 Material Requirements Planning (MRP)

 Just in time inventory system

 Material Requirements Planning Just in time inventory system
Production MRP systems schedule production JIT systems schedule
scheduling to meet forecasted sales. production in response to
customer demands
The number of creating an “optimal” quantity of eliminating finished goods
goods inventory finished goods inventory inventory,
Nature of MRP systems are more effectively JIT inventory systems are
product used with products that have especially useful for products
predictable patterns of demand that have relatively short life
cycles and for which demand
cannot be accurately predicted,
Cost & Both methods can reduce costs and increase productivity & efficiency
efficiency compared to conventional methods (EOQ: Economic Order Quantity,
whose objective is to maintain sufficient inventory to ensure production
is never interrupted).
SELECT SUPPLIER
PURCHASE ORDER
Purchase order: A document that formally requests a
supplier to sell and deliver specified products at
designated prices. It is also a promise to pay and
becomes a contract once the supplier accepts it.

Blanket purchase order: A commitment to purchase

specified items at designated prices from a particular
supplier for a set time period, often one year.
Advantages:
reduce the buyer’s uncertainty about reliable
sources of raw materials
help the supplier plan its capacity and
operations more effectively.
What are differences between Blanket PO & PO?
FOUR BASIC EXPENDITURE CYCLE ACTIVITIES

Cash
Receiving disbursement
Approve
Ordering supplier
invoices
RECEIVING
RECEIVING
Warehouse Function/
Receiving Function
Requisition Department
• Receiving clerk verifies the • Participate in examining
quantity and quality of the quantity and quality of
received merchandise. incoming products
• Accepting deliveries from • Route inventory to the
suppliers warehouse
• Record receiving • Verify receiving information
information
• Send receiving information
to related departments

16
DOCUMENTS

• Receiving report: A document that

records details about each delivery,
including the date received, shipper,
supplier, quantity received.

• In the case of damaged or poor-

quality goods, Debit-memo is
prepared.
FOUR BASIC EXPENDITURE CYCLE ACTIVITIES

Cash
Receiving disbursement
Approve
Ordering supplier
invoices
 voucher package: PO, RR, Supplier invoice

ACCOUNTS PAYABLE DEPARTMENT

 Receive Supplier invoice
 Reconciliation of documents in the voucher package ( Purchase order,
Receiving report, and Supplier invoice)
 Update A/P

BP kế toán phải trả cần kiểm tra. đối chiếu thông

tin gì khi chấp nhận hóa đơn? Tại sao? Mục đích
đối chiếu là gì?
DOCUMENTS

Voucher Package Disbursement Voucher

• The set of documents used • A document that identifies

to authorize payment to a the supplier, lists the
supplier consisting of a outstanding invoices, and
purchase order, receiving indicates the net amount to
report, and supplier invoice. be paid after deducting any
applicable discounts and
allowances.
WAYS TO PROCESS SUPPLIER INVOICES

Non-voucher systems Voucher systems

• Approved invoices are classified • Approved invoices are classified

by supplier by expected payment date
• Record Accounts Payable file • Create Disbursement Voucher
• Emphasis on Supplier-oriented • Emphasis on payment planning
payment for individual supplier

Reduce the number of Checks D.V can be prenumbered

(D.V. can include one/ some => Simplifying tracking all Well-controlled cash flow
supplier invoices) payables
CONTROLLING PURCHASING OFFICE SUPPLIES

• Establish a budget for office supply purchases.

• Identify designated suppliers and categories of office supplies bought
from designated suppliers
• Employ "Credit card for authorized purchases" (Procurement card).
• Connect payment from the ”Procurement card" to the "office supplies
account"
FOUR BASIC EXPENDITURE CYCLE ACTIVITIES

Cash
Receiving disbursement
Approve
Ordering supplier
invoices
CASH DISBURSEMENTS
PAYMENT METHODS

CASH

CHECK

EFT: electronic funds transfer

FEDI: Financial electronic data interchange

KIỂM SOÁT CHU TRÌNH CHI PHÍ
Risks Controls
1 Incorrect or invalid master • Data Processing Integrity Control
file • Restrict Access to Master Files
• Evaluate All Changes to Master Files

2 Unauthorized disclosure of • Access Control

sensitive information • Data Encryption
3 Lost or destroyed data • Disaster Recovery Procedures

4 Poor performance • Using the management reporting system

KIỂM SOÁT CHU TRÌNH CHI PHÍ
Risks Controls
5 Order more or less than • Use a regular inventory system
needed • Use Bar coding or RFID
• Periodic inventory
6 Buying unnecessary items • Use a regular inventory system
• Evaluate and approve purchase requests
• Use centralized purchasing
7 Buy at high prices • Use a price list
• Conduct a tender or select a supplier
• Evaluate a purchase order
• Develop a budget
KIỂM SOÁT CHU TRÌNH CHI PHÍ
Rủi ro Kiểm soát
8 Buy low • Purchase only from approved suppliers
quality • Evaluate and approve purchases from new
goods suppliers
• Monitor product quality
• Purchasing manager is responsible for rework
costs or breakage or damage to purchased goods
9 Unreliable • Require suppliers to provide SP quality
supplier management procedures
• Collect and monitor supplier delivery performance
data
KIỂM SOÁT CHU TRÌNH CHI PHÍ
Rủi ro Kiểm soát
10 Mua hàng từ • Duy trì danh sách nhà cung cấp đượcchấp thuận và hệ thống
nhà cung chỉ chấp thuận nếu đặt hàng lựa chọn người bán trong danh
cấp không sách.
được ủy • Đánh giá và chấp thuận việc mua hàng từ nhà cung cấp mới
quyền • Kiểm soát các xử lý liên quan EDI
11 Hoa hồng • Nghiêm cấm nhận quà từ nhà cung cấp
cho người đi • Luân chuyển nhân viên thực hiện công việc
mua • Yêu cầu Bp mua hàng công bố báo cáo mâu thuẫn lợi ích cá
(kickback) nhân và công ty (các gắn kết lợi ích cá nhân hoặc tài chính
liên quan nhà cung cấp)
• Kiểm toán nhà cung cấp
KIỂM SOÁT CHU TRÌNH CHI PHÍ
Rủi ro Kiểm soát
12 Chấp nhận hàng hóa • Đối chiếu hàng giao với “đơn đặt hàng” trước khi
không được đặt chấp nhận việc giao hàng
hàng
13 Sai sót trong đếm • Không thông báo số lượng đặt hàng với bộ phận
kiểm hàng nhận hàng)
• Nhân viên nhận hàng cần ký phiếu nhập kho
• Thưởng trách nhiệm cho nhân viên nhận hàng
• Sử dụng Bar coding hoặc RFID
• Xây dựng thủ tục hệ thống kiểm tra tự động và phát
hiện chênh lệch giữa đặt hàng và nhận hàng
KIỂM SOÁT CHU TRÌNH CHI PHÍ
Rủi ro Kiểm soát
14 Kiểm tra nhận • Xây dựng và dùng ngân sách để kiểm soát
dịch vụ • Kiểm toán
15 Ăn cắp hàng • Giới hạn tiếp cận hàng tồn kho về mặt vật lý
tồn kho • Lập và ghi nhận bằng chứng từ tất cả các hoạt động
giao nhận, nhập, xuất hàng tồn kho
• Kiểm kê kho và đối chiếu ghi chép kế toán
• Phân chia trách nhiệm: Thủ kho không phải là người
nhận hàng
KIỂM SOÁT CHU TRÌNH CHI PHÍ

Rủi ro Kiểm soát

16 Sai sót trong • Kiểm tra tính chính xác của hóa đơn
hóa đơn nhà • Yêu cầu biên lai thu tiền chi tiết cho việc mua hàng bằng
cung cấp thẻ tín dụng của công ty (procurement card)
• Dùng hệ thống ERS
• Hạn chế tiếp cận tới tập tin chính nhà cung cấp
• Kiểm tra hóa đơn vận chuyển và sử dụng kênh giao hàng
được chấp thuận
KIỂM SOÁT CHU TRÌNH CHI PHÍ

Rủi ro Kiểm soát

17 Sai sót chuyển vào tài • Kiểm soát nhập liệu
khoản chi tiết phải trả • Đối chiếu các ghi chép (mẫu tin) kế toán
phải trả chi tiết với tài khoản tổng hợp
KIỂM SOÁT CHU TRÌNH CHI PHÍ
Rủi ro Kiểm soát
18 Không được hưởng • Lưu hóa đơn theo ngày đến hạn thanh toán để được
các ưu đãi do thanh hưởng chiết khấu
toán không phù hợp • Lập dự toán cho dòng tiền
19 Thanh toán cho hàng • Đối chiếu hóa đơn và các chứng từ liên quan
không nhận • Lập ngân sách (mua dịch vụ)
• Yêu cầu biên lai nộp tiền cho các chi phí du lịch
• Sử dụng thẻ tín dụng của công ty (procurement card)
cho chi phí đi lại
KIỂM SOÁT CHU TRÌNH CHI PHÍ

Rủi ro Kiểm soát

20 Thanh toán • Yêu cầu có “bộ chứng từ thanh toán” đầy đủ cho các
trùng lần thanh toán
• Chỉ được dùng bản gốc cho thanh toán
• Đóng dấu đã thanh toán lên tất cả các chứng từ (kể cả
chứng từ gắn kèm) cho các khoản thanh toán
KIỂM SOÁT CHU TRÌNH CHI PHÍ

Rủi ro Kiểm soát

21 Ăn cắp • Hạn chế tiếp cận và đảm bảo an toàn cho CHECK trắng và thiết bị
tiền tạo/ký CHECK
• CHECK cần đánh số trước và đếm, kiểm thường xuyên bởi thủ quỹ
• Kiểm soát truy cập trạm nhập liệu thanh toán EFT
• Sử dụng hệ thống hạ tầng công nghệ của công ty (máy tính và ứng
dụng truy cập web) để thực hiện giao dịch ngân hàng trực tuyến
(online banking)
• Phân chia trách nhiệm giữa chức năng viết CHECK và kế toán phải trả
KIỂM SOÁT CHU TRÌNH CHI PHÍ

Đe dọa Kiểm soát

21 Ăn cắp • Đối chiếu thường xuyên tài khoản NH và số tiền ghi sổ, và do
tiền người khác người làm thủ tục chi tiền
• Giới hạn truy cập tới tập tin chính nhà cung cấp
• Giới hạn số lượng NV bán hàng được xử lý tạo nhà cung cấp 1 lần
hoặc xử lý hóa đơn từ nhà cung cấp 1 lần
• Sử dụng “Quỹ chi tiêu lặt vặt” petty cash
• Kiểm toán đột xuất “quỹ chi tiêu lặt vặt” “Petty cash
KIỂM SOÁT CHU TRÌNH CHI PHÍ

Rủi ro Kiểm soát

22 Sửa CHECK • Sử dụng máy bảo vệ CHECK
• Sử dụng mực in và giấy đặc biệt cho in CHECK
• Hợp đồng với ngân hàng để sử dụng dịch vụ đặc biệt giúp
doanh nghiệp chống gian lận CHECK (Positive Pay service)

23 Vấn đề • Sử dụng dự toán cho dòng tiền

dòng tiền
PROBLEM: IDENTIFY WEAKNESSES, RISKS AND CONTROLS
• Last year the Diamond Manufacturing Company purchased over $10 million worth of office
equipment under its “special ordering” system, with individual orders ranging from $5,000
to $30,000. Special orders are for low-volume items that have been included in a
department manager’s budget. The budget, which limits the types and dollar amounts of
office equipment a department head can requisition, is approved at the beginning of the
year by the board of directors. The special ordering system functions as follows:
• Purchasing A purchase requisition form is prepared and sent to the purchasing
department. Upon receiving a purchase requisition, one of the five purchasing agents
(buyers) verifies that the requester is indeed a department head. The buyer next selects
the appropriate supplier by searching the various catalogs on file. The buyer then phones
the supplier, requests a price quote, and places a verbal order. A prenumbered purchase
order is processed, with the original sent to the supplier and copies to the department
head, receiving, and accounts payable. One copy is also filed in the open-requisition file.
When the receiving department verbally informs the buyer that the item has been received,
the purchase order is transferred from the open to the filled file. Once a month, the buyer
reviews the unfilled file to follow up on open orders.
 PROBLEM: IDENTIFY WEAKNESSES, RISKS AND CONTROLS
• Receiving The receiving department gets a copy of each purchase order. When equipment
is received, that copy of the purchase order is stamped with the date and, if applicable, any
differences between the quantity ordered and the quantity received are noted in red ink.
The receiving clerk then forwards the stamped purchase order and equipment to the
requisitioning department head and verbally notifies the purchasing department that the
goods were received.
• Accounts Payable Upon receipt of a purchase order, the accounts payable clerk files it in
the open purchase order file. When a vendor invoice is received, it is matched with the
applicable purchase order, and a payable is created by debiting the requisitioning
department’s equipment account. Unpaid invoices are filed by due date. On the due date, a
check is prepared and forwarded to the treasurer for signature. The invoice and purchase
order are then filed by purchase order number in the paid invoice file.
• Treasurer Checks received daily from the accounts payable department are sorted into two
groups: those over and those under $10,000. Checks for less than $10,000 are machine
signed. The cashier maintains the check signature machine’s key and signature plate and
monitors its use. Both the cashier and the treasurer sign all checks over $10,000.
PROBLEM: IDENTIFY WEAKNESSES, RISKS AND CONTROLS
• Last year the Diamond Manufacturing Company purchased over $10 million worth of office
equipment under its “special ordering” system, with individual orders ranging from $5,000
to $30,000. Special orders are for low-volume items that have been included in a
department manager’s budget. The budget, which limits the types and dollar amounts of
office equipment a department head can requisition, is approved at the beginning of the
year by the board of directors. The special ordering system functions as follows:
• Purchasing A purchase requisition form is prepared and sent to the purchasing
department. Upon receiving a purchase requisition, one of the five purchasing agents
(buyers) verifies that the requester is indeed a department head. The buyer next selects
the appropriate supplier by searching the various catalogs on file. The buyer then phones
the supplier, requests a price quote, and places a verbal order. A prenumbered purchase
order is processed, with the original sent to the supplier and copies to the department
head, receiving, and accounts payable. One copy is also filed in the open-requisition file.
When the receiving department verbally informs the buyer that the item has been received,
the purchase order is transferred from the open to the filled file. Once a month, the buyer
reviews the unfilled file to follow up on open orders.
PROBLEM: IDENTIFY WEAKNESSES, RISKS AND CONTROLS
• Receiving The receiving department gets a copy of each purchase order. When equipment
is received, that copy of the purchase order is stamped with the date and, if applicable, any
differences between the quantity ordered and the quantity received are noted in red ink.
The receiving clerk then forwards the stamped purchase order and equipment to the
requisitioning department head and verbally notifies the purchasing department that the
goods were received.
• Accounts Payable Upon receipt of a purchase order, the accounts payable clerk files it in
the open purchase order file. When a vendor invoice is received, it is matched with the
applicable purchase order, and a payable is created by debiting the requisitioning
department’s equipment account. Unpaid invoices are filed by due date. On the due date, a
check is prepared and forwarded to the treasurer for signature. The invoice and purchase
order are then filed by purchase order number in the paid invoice file.
• Treasurer Checks received daily from the accounts payable department are sorted into two
groups: those over and those under $10,000. Checks for less than $10,000 are machine
signed. The cashier maintains the check signature machine’s key and signature plate and
monitors its use. Both the cashier and the treasurer sign all checks over $10,000.