Question 7: Internal Control and Purchasing Process [27 Marks]Headquartered in Sydney, FreshMart Pty Ltd is a grocery retailer that specialises in fresh produce, dairy, and packaged foods. FreshMart operates multiple supermarkets across Queensland and New South Wales. To maintain smooth store operations, FreshMart relies on an effective purchasing and supplier payment process to ensure goods are ordered, delivered, received, and paid for on time. The Chief Executive Officer (CEO), Alex Chen, together with the Chief Financial Officer (CFO), Priya Kapoor, requested a review of the Business Process Modelling and Notation (BPMN) of the Purchases and Payments process. Figure 1 illustrates the top-level Purchases and Payments process, while Figure 2 expands on the activities in RECEIVING DELIVERIES (shown as a collapsed sub-process in Figure 1 with a ‘+’ symbol). Figure 1 Top-Level Purchases and Payments Process at FreshMartFigure 2 Receiving Deliveries Process at FreshMartRequired:[Fill in the blank]
Provide a clear narrative description of the top-level FreshMart Purchases and Payments BPMN process shown in Figure 1. Your description should explain the activities that take place in this process in a sequential way. [10 Marks] Notes: You are NOT required to provide a description of Figure 2. For processes that involve time events, what matters most is that you demonstrate a clear understanding of how these events work. Minor differences in the exact time or wording will not be penalised, especially if the annotations in Figure 1 are not clearly visible on your end. Focus on showing your understanding rather than worrying about exact phrasing.[Fill in the blank]
Identify and explain TWO (2) potential control weaknesses or inefficiencies in Figure 1. For each one, discuss the possible consequences. Then, recommend ONE (1) practical control or improvement to address each weakness or inefficiency and justify your recommendation. [6 marks][Fill in the blank]
Management noted the following activities illustrated in Figure 2: The warehouse staff member, Jake, receives a delivery of milk. He checks whether the delivery is associated with a purchase order (PO) in the ERP system. He finds the corresponding PO, along with the items and quantities ordered. Jake then checks the expiry date of the milk and finds no issues. After this, he accepts the delivery, records the quantity, and completes the delivery report in the system. Finally, he updates the inventory records and places the milk in the warehouse. [6 marks] Based on the activities Jake performed during the receiving delivery stage: Identify TWO (2) potential risks involved and discuss their possible consequences. Explain the correct way these activities should be performed by FreshMart and Jake.[Fill in the blank]
FreshMart develops and reviews its purchase and payments business process through BPMN diagrams. This demonstrates how business documentation helps describe process operations and support process improvement. Based on the Data Processing Model, explain how business documentation adds value to FreshMart. [5 Marks] Hint: You should explain how business documentation adds value to FreshMart at each stage of the Data Processing Model. Finally, provide a clear overall conclusion on the value of business documentation to FreshMart.[Fill in the blank]
