Purchasing Procedures and Internal Controls

Vocabulary flashcards based on purchasing procedures, internal control mechanisms, analytics, ERP systems, and electronic commerce risks.

Purchase Requisition

An internal document requesting the purchasing department to procure goods/services.

Purchase Order

A formal external document sent to a vendor to request the delivery of specified goods/services under stated conditions.

Vendor File

A file that includes approved vendors to ensure only reliable vendors are used.

Three-way matching

An internal control procedure that compares the vendor’s invoice, the purchase order, and the receiving report to detect overcharges.

Preventive Control

Control that stops errors before they occur, such as password-protected systems.

Detective Control

Control that identifies errors after they occur, like bank reconciliations.

Corrective Control

Control that corrects identified problems, such as backup systems to restore lost data.

Small Data Analytics

Involves structured, manageable datasets that traditional tools can analyze.

Big Data Analytics

Involves large, varied, fast-changing datasets needing advanced technologies like AI and machine learning.

Data Mining

The process of identifying patterns in data.

Predictive Analytics

The practice of forecasting future trends based on historical data.

Data Visualization

The graphical presentation of data to facilitate understanding.

Business Intelligence

The gathering and analyzing of internal and external information for informed decision-making.

Fixed Asset System

Manages long-term assets, such as equipment and buildings, over their useful life.

Expenditure Cycle

Focuses on short-term purchasing and payment processes for goods and services.

Entity Relationship (ER) Diagram

A graphical representation of entities and their relationships used in database design.

ERP System

Integrated software managing core business processes in real time.

Cost Overruns

Budget issues arising from underestimating the cost of a project.

Resistance to Change

Employees' reluctance to adapt to new systems or processes.

System Complexity

Challenges involved in configuring a complex system to meet business needs.

Data Migration Issues

Problems that occur during the transfer of old data to a new system.

In-House Development

Creating a system internally to meet unique business needs more closely.

Systems Developers

Individuals or teams responsible for designing and building a system.

End-Users

The individuals who will use the system and provide requirements.

Management

The group that approves funding and oversees system development.

Security Breaches

Cyberattacks targeting sensitive data, compromising security.

Privacy Concerns

Issues related to the misuse of customer information.

Legal Compliance

The challenge of adhering to varied international laws in business.

System Downtime

Interruptions in service that affect operations and sales.