The first control activity is about receiving department. When goods are received, the receiving department verifies the order by comparing the external packing slip with the internal purchase order. And this copy is modified so that the quantity of items ordered is blacked-out. We can see that this control activity does not permit the receiving department to know about the quantity of items ordered. This is a way to motivate staff in receiving department to count the amount of received products on their own.
And to avoid someone skipping this procedure. Because there is a potential risk that the inventory in the warehouse does not match what is in the book. Since the black ink is not permanent, the staff in the receiving department may determine the quantity of items ordered and skip counting the received products. So, this is not a thorough control activity. Because the blacked-out number is an uncertain factor. The receiving department is not supposed to get a purchase order with quantity items. This control activity can be updated by using a separate report with item descriptions. Quantities should not be rented.
So, the second control activity. Once a vendor has been selected, five copies of pre-numbered purchase order are prepared by purchasing department. It is obvious that when purchase order has been decided, there will be a document that is sent to the original department who made the purchasing request. Because the original department need a confirmation about the details about the merchandise, whether it is like the original requirements. So, this is the purpose of this control activity. However, the department preparing the purchase requisition is not supposed to get a copy f the purchase order.
Since purchase order is an authorization to purchase. It should be sent to the vendor only. There is a potential risk that the department will use this purchase order as an authorization to reorder products. And that will be something about employee fraud. This control activity can be updated by just giving a purchase confirmation document to the department who prepared the purchase requisition. So details of the ordered items are reviewed and there will be no deficiency to cause any employee fraud in the original department.