Internal controls case answer

Greystone Co is a retailer of ladies clothing and accessories. It operates in many countries around the world and
has expanded steadily from its base in Europe. Its main market is aimed at 15 to 35 year olds and its prices are mid
to low range. The company’s year end was 30 September 20X0.
In the past the company has bulk ordered its clothing and accessories twice a year. However, if their goods failed to
meet the key fashion trends then this resulted in significant inventory write downs. As a result of this the company
has recently introduced a just in time ordering system. The fashion buyers make an assessment nine months in
advance as to what the key trends are likely to be, these goods are sourced from their suppliers but only limited
numbers are initially ordered.
Greystone Co has an internal audit department but at present their only role is to perform regular inventory counts
at the stores.
Ordering process
Each country has a purchasing manager who decides on the initial inventory levels for each store, this is not done
in conjunction with store or sales managers. These quantities are communicated to the central buying department
at the head office in Europe. An ordering clerk amalgamates all country orders by specified regions of countries,
such as Central Europe and North America, and passes them to the purchasing director to review and authorise.
As the goods are sold, it is the store manager’s responsibility to re-order the goods through the purchasing
manager; they are prompted weekly to review inventory levels as although the goods are just in time, it can still take
up to four weeks for goods to be received in store.
It is not possible to order goods from other branches of stores as all ordering must be undertaken through the
purchasing manager. If a customer requests an item of clothing, which is unavailable in a particular store, then the
customer is provided with other branch telephone numbers or recommended to try the company website.
Goods received and Invoicing
To speed up the ordering to receipt of goods cycle, the goods are delivered directly from the suppliers to the
individual stores. On receipt of goods the quantities received are checked by a sales assistant against the supplier’s
delivery note, and then the assistant produces a goods received note (GRN). This is done at quiet times of the day
so as to maximise sales. The checked GRNs are sent to head office for matching with purchase invoices.
As purchase invoices are received they are manually matched to GRNs from the stores, this can be a very time
consuming process as some suppliers may have delivered to over 500 stores. Once the invoice has been agreed
then it is sent to the purchasing director for authorisation. It is at this stage that the invoice is entered onto the
purchase ledger.
(i) Identifies and explains FOUR deficiencies in that system
(ii) Explains the possible implication of each deficiency
(iii) Provides a recommendation to address each deficiency.
credit: BPP ACCA Kit 2017-2018

All three of my answers are not in the kit answer so I wonder whether they are correct or not. Could you please help me?

My answers:
1. Deficiency
The ordering clerk amalgamates all country orders specified by regions
1. Implication:
The clerk could merge incorrectly (ex: omit one or some orders)
1.Recommendations
The merge process should be recalculated by another clerk and evidenced by her/his signature.

2.Deficiency
The quantities of good received is checked by only sales assistant
2.Implication:
The sales assistant could count/check incorrectly (ex: the actual amount is less than the GDN) ,leading to incorrect inventory and excess payment
2.Recommendations
Purchasing department should allocate one member to join the sales assistant and the sales manager should supervise the process

3.Deficiency
The purchase invoices are manually matched to GRNs and send only them to director for authorization
3.Implication:
-Due to a large volume, the matching process could not be probably done by staff (they might do the match for some but not all) or human errors

-The purchasing director could not have some necessary information for authorization (Ex: he/she could not corroborate whether the individual stores receiving goods or not)
3.Recommendations
-The another staff should do match a sample of purchase invoices with related GRNs again daily

-Sending purchase invoice with some related documentations (purchase orders, GRNs). It also creates the force for staff to do the match probably
(GDN: goods delivery note, GRN: goods received note)