What documents constitute the AP packet

What evidence does each document provide?
Answer
The three documents of the AP packet are the purchase requisition, purchase order, and receiving report (in addition to the invoice itself). The purchase requisition originates from inventory control and represents the inventory requirements. The purchase order originates from the purchasing department and represents an order placed. The receiving report originates from the receiving department and represents the quantity and types of goods received. Thus, the accounts payable must determine 1. that the goods ordered were requested by a user-department (i.e. inventory control), 2. that the purchasing department ordered the goods from a valid vendor, 3. that the goods were actually received in good condition, and 4. that the invoice price is correct. If all conditions are met, then the invoice should be paid.

Discussion Question 6
What is central to a successful EDI implementation?
Answer

A key element of successful EDI is the implementation of a trading partner agreement to eliminate the discrepancies that require human involvement to resolve.
Discussion Question 9
You are conducting an end-of-year audit. Assume that the terms of trade between a buyer and a seller are free on board (FOB) destination. What documents provides evidence that a liability exists and may be unrecorded?
Answer
The Receiving Report is evidence that the items have been received and a liability has been realized. If the Invoice did not come in by end-of-year, then the liability may not have been recognized in the period under review.
Discussion Question 10
How does the general control area of systems development and program change impact day-to-day transaction processing?
Answer
. An undetected program error may affect thousands or even millions of transactions with devastating consequences to the financial statements. An organization’s systems development and program change process is therefore critical to ensuring that computer applications do what they are intended to do when they are placed into service and are protected from accidental, malicious, or fraudulent modifications over their service lifetime.
Session 5 Discussion

Session 5 Discussion
by Laura Pokojni Young – Thursday, 15 May 2014, 10:36 AM

Please answer the following:
Hall
Discussion Question 6
What is central to a successful EDI implementation?
Discussion Question 10
How does the general control area of systems development and program change impact day-to-day transaction processing?

Reply

Re: Session 5 Discussion
by Maggie Hunt – Monday, 2 June 2014, 11:23 AM

Discussion Question 6
What is central to a successful EDI implementation?
The core to a successful EDI implementation is to create a trading partner agreement between a company and supplier(s) in order to eliminate highly labor-intensive activities in verification and reconciliation of purchase orders, receiving reports, supplier’s invoices in the AP function. For example,Covalentworks is an EDI software and solution company that provides web-based /cloud based EDI services for B2B conducting their expenditure cycles efficiently and effectively around the world.
Discussion Question 10
How does the general control area of systems development and program change impact day-to-day transaction processing?
The general control area of systems development and program is based upon the advanced technology to automate purchases and cash disbursement cycles, which eliminate day-to-day transaction processing heavily depending on human activities in monitoring inventory control, preparing purchase order, receiving goods report, reconciling AP packet, authorizing cash disbursement, and posting general ledger in the manual environment. The software applications can perform each of the above functions in the computer system automatically, which is cost-effective in human resources and potentially reduces errors in the functions.

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Re: Session 5 Discussion
by Laura Pokojni Young – Monday, 2 June 2014, 7:16 PM

Systems development has a great impact on day-to-day transaction processing. As you mentioned, the elimination of human activities by automating the tasks has a huge impact on efficiency and also decreases the amount of errors due to prior heavy use of human involvement.

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Re: Session 5 Discussion
by Parminder Kaloti

Discussion Question 6
What is central to a successful EDI implementation?
The implementation of trading partner agreement in an effort to remove inconsistencies that need human involvement to be resolved is the key factor to a successful EDI. Since the receiving functions and the payable tasks of reconciling purchase orders, receiving reports, and supplier invoices required a lot of work and money it would be helpful to use this system in order to reduce that labor.

Discussion Question 10
How does the general control area of systems development and program change impact day-to-day transaction processing?
The general control area of systems development and program change impact day-to-day transaction processing tremendously. For example, this system helps companies in automating their transactions by eliminating human error and saving cost and time. The system can automatically perform many clerical tasks which result in smaller and more efficient traditional departments. Additionally it automatically records the receiving data, matches items against the PO, closes the receiving report, updates inventory subsidiary records to reflect the receipt of inventory items, and updates the general ledger inventory control account.

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Re: Session 5 Discussion
by Laura Pokojni Young – Wednesday, 4 June 2014, 4:45 PM

Great example – reconciling of this information is indeed very time consuming. Instituting a successful EDI will create much more efficiency from a labor standpoint and over time, cost standpoint as well.

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