Adam & Co Expenditure Cycle 4

Adam & Co Expenditure Cycle 1
CASE STUDY – ADAM & CO
By (Student’s Name)
Professor’s Name
College
Course
Date

Adam & Co Expenditure Cycle 2
Executive Summary
This paper presents a report which resulting from the examination of Adam & Co
expenditure cycle composed of purchase system, payroll system and cash disbursement
system. Adam & Co uses a centralized system of accounting with various networking
terminals differently situated in the UK. Adam & Co is discussed based on the above
mentioned systems alongside potential weaknesses and risk in each of the system

Adam & Co Expenditure Cycle 3
Table of Contents
Executive Summary...................................................................................................................2
Introduction................................................................................................................................4
Data Flow Diagram of Purchases and Cash Disbursements Systems........................................4
Purchase System.....................................................................................................................4
Cash Disbursement Systems..................................................................................................7
Data Flow Diagram of Payroll System......................................................................................8
System Flowchart of Purchases System...................................................................................10
System Flowchart of Cash Disbursements System..................................................................12
System Flowchart of Payroll System.......................................................................................13
Internal Control Weaknesses and Risks in Each System.........................................................14
Purchases System.................................................................................................................14
Cash Disbursement Systems................................................................................................14
Payroll Systems....................................................................................................................14
Conclusion................................................................................................................................14
References................................................................................................................................15

Purchasing Department
Inventory Warehouse
Cash Disbursement Department
Monitor inventory records
Updates inventory records
Receives Goods
Prepares Digital Purchase Order
Updates Inventory Control AccessUpdates AP Control Access
Updates digital AP subsidiary ledger
Valid Vendor File
AP Pending File
Vendor
Account Payable Department
Inventory Subsidiary Ledger
Receiving File
Digital purchase order records
Purchase order copy 1
Purchase order copy 2
Receiving reports copy
Receiving report copy 2
Sends invoice
Sends invoice
Inventory level
Adam & Co Expenditure Cycle 4
Introduction
Adam & Co expenditure cycle allows human resources, physical materials and
business cash to be converted thereby enhancing various functions. This paper analysed
expending cycle through cash disbursement, purchase and payroll systems applicable to
Adam & Co alongside their associated potential weakness and risks. This enables the Chief
Operation Officer to understand the internal control of the cycle to trigger desirable changes.
Data Flow Diagram of Purchases and Cash Disbursements Systems
Purchase System
Figure 1: Purchase System Data Flow Diagram
Inventory
Subsidiary
Ledger