Controls in the Traditional

Environment

Name Matrics No

Alia Nursyifa binti Arzok 1180556

Nur Ain binti Mohd Zambri 1180558

Siti Nur Aini binti Latif 1180560

Transaction Authorizations

move tickets
(with authorized materials
work orders
signature from requisitions
reflect a legitimate
each work station) authorize the
need based upon
authorize the warehouse to
sales forecast and
movement of the release materials
the finished goods
batch through the to the work
on hand
various work centers
centers
Segregation of Duties
○ production planning and
control department is separate
from the work centers

○ inventory control separate

from RM and FG inventory
custody

○ cost accounting function

separate from work centers

○ GL department must be
separated from other
accounting functions
 Supervision
supervisors in the work centers oversee the
usage of raw materials in the production
process to ensure that all released materials
are used in production and waste is
minimized

employee timecards and job tickets are

checked for accuracy
 Access Control

direct access to indirect access to

assets assets

storerooms, quantities in excess of materials requisitions,

production work standard amounts excess materials
centers, and finished should require requisitions, and
goods warehouses approval employee time cards
 Accounting Records
pre-numbered work orders cost sheets
documents

1 2 3
move tickets
4

5 6 7

material WIP and FGs

job tickets requisitions files
 Independent Verification
cost accounting reconciles material usage (material requisitions)
and labor usage (job tickets) with prescribed standards, and
variances are investigated

GL dept. verifies the total movement from WIP to FG by

reconciling journal vouchers from cost accounting and inventory
subsidiary ledger summaries from inventory control

internal and external auditors periodically verify the raw materials

and FGs inventories on hand through a physical count
Summary of Internal Controls