XYZ Company sells computer peripherals and related devices, such as printers, ink, flash drives and cables. XYZ has a staff of three purchasing agents, each of whom overseas a specific set of inventory items.
Each purchasing agent uses his/her discretions in making decision about when to order inventory, how much inventory to order and which vendor to purchase from. When ordered inventory arrives at XYZ, one of two receiving clerks matches the items, quantities and vendors against a copy of the purchase order, then either stocks the merchandise on the shelves or put in the storeroom.
XYZ Accountant receives a copy of that invoice from the vendor, as well as an e-mail from the receiving clerks that the merchandise has been received. The e-mail also includes the relevant purchase order number. The Accountant files the invoice by date in a filing cabinet; once a week, the Accountant removes invoices from the filing cabinet and pays them by check. To cut down on clutter in the office, the Accountant shreds the vendor invoice after the check has been paid by the bank. The Accountant also completes a bank reconciliation within two weeks of receiving the banks statement in the mail.
Requirements:
1. Upon reading the case, discuss the need for an operations audit.
2.Integrate the concept of the E's of Operations Audit, as applicable to identify potential problems in the case.
3. As an auditor, what are the skills and qualities you need to have an effective audit and to resolve the problems encountered?
4. As an Auditor, what will be your recommendations to XYZ Co.?
(I need the requirement three the most)