[ObsceneTickmark]

Hi everyone, this is my first post on Another71. I am studying for AUD currently. After a quick search through the forum, I want to ask for insight on an expenditure cycle control. Regarding the receipt of merchandise, here’s what I understand about “blind” PO controls.

A shipment arrives to the receiving dock and a clerk must complete a receiving report verifying the quantity of goods received. Under “normal PO” circumstances, a lazy clerk would have the ability to observe the quantity ordered from the PO, and simply apply the same figure to the receiving report without ever actually counting or inspecting the goods.

This leads to the theory of the “blind” PO, where a clerk’s copy of the PO will not contain the ordered quantity, thereby “forcing” him to actually count and inspect the goods in order to complete a receiving report, leading to earlier detection of theft, improper shipment, etc.

My problem with this control is that there seem to be other ways in which this receiving clerk could deceptively complete a received quantity on the RR. Most carriers will have a record of quantity shipped that would be available for the receiving clerk to review. Also, many times quantities will be printed on the sides of containers and boxes. What would prevent the clerk from simply copying the carrier’s figures to the RR without ever counting the goods? If this is the case, and the clerk is not actually counting the quantity and is using a blind PO, isn’t a lowered control risk falsely accepted?

I’m sure I’m missing something simple, but I really can’t see how omitting the information on the report would prevent laziness on the part of the receiving clerk.

Thanks!

[mla1169]

No the carriers only get a manifest with the # of boxes shipped. If there are multiple items in each box, the carrier has no idea. They know the # of boxes and total weight.

And some shipments do indicate the quantity on the outside of the box but that is not usually the case. In fact it's pretty rare.

In either case control risk is only lowered not eliminated. There's ALWAYS a way around controls.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[ObsceneTickmark]

MLA, thank you for your response. That clears it up for me. Happy holidays!

[Author]

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