Expenditure Cycle Analysis and Internal Control: Adam & Co. Report

This report presents an analysis of the expenditure cycle of Adam & Co., a wholesale industrial supplies company. The study examines the internal control systems within the purchase system, cash disbursement system, and payroll system, utilizing system flowcharts to illustrate the processes. The report identifies weaknesses in the internal controls, such as manual data entry and lack of verification processes, and discusses the associated risks. The analysis highlights potential issues in the purchase system, cash disbursement system, and payroll system, recommending improvements like the implementation of a centralized computing system to reduce human error and fraud. The conclusion emphasizes the importance of proper document verification and centralized systems to maintain effective internal controls.