Internal Controls

1299 WordsDec 28, 20126 Pages
Internal Control Questionnaire—Sales Transaction Processing Assertions and Questions Yes, No, N/A Comments Occurrence assertion: 1. Is the credit department independent of the sales department? Yes The Treasurer Department handles credit sales. 2. Are sales of the following types controlled by the same procedures described below? Sales to employees, COD sales, disposals of property, cash sales, and scrap sales. No Additional details are necessary to determine the sales types. Each of the sales type will have the same process with the exception of sales to employees. 3. Is access to sales invoice blanks restricted? Yes The documentation pertaining to invoices blanks is kept in a filing cabinet with a lock for security.…show more content…
5. All credit sales are approved for customers prior to shipment. 6. In the shipping department all bills of lading are pre-numbered and compared to the invoice. 7. Marketing is in charge of checking the accuracy of the sales for the period with an analysis or statistical check. 8. There is an accounting manual that shows how to date the sale as well as to classify the sale. Weakness’ 1. Sales order documents are not pre-numbered, and are kept in busy sales clerks’ area. 2. Sales to employees do not follow the same procedures; additional information is needed to determine the sale type. 3. Invoice number sequence is not checked for missing invoices in the billing department. 4. Bills of lading numbers are not checked for missing billing of ladings in the shipping department. 5. All credits for returned items are missing supporting documentation as to the return and who authorized. 6. Even though the sales periodic data is checked for accuracy it is not verified by the accounts receivable department. Revenue and Cash Receipts Cycle Index Control Activity Implications Test control Test procedures S-1 Invoices are signed by customer or salesman over than phone By having a signature, this insures the order was actually made and taken by personnel Have treasurer’s office review order to insure signature before running credit check Company can have signature verification before order is moved to treasurer office S-2 Customers

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