Apple Blossom Internal Control - AR & Credit Sales

Apple Blossom Internal Control - AR & Credit Sales...

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Apple Blossom Cologne Company Accounts Receivable and Credit Sales Internal Control 1/12/2004 Internal Control Weaknesses – Credit Sales system 1. Are customer subsidiary ledgers maintained by a person who has no access to Cash? a. No, the accounts Receivable clerk gas access to customer checks and cash  prelist.  This is a weakness because an employee might be able to forge  customer accounts or report payments in the inappropriate fiscal year if the AR  clerk is trying to help out the customer on the outside of business. 2. Are unauthorized persons unable to obtain access to customer accounts? a. No, All LAN reports and printouts are left unlocked and are accessible to anyone.  Additionally, the cashier has access to the LAN accounts receivable application.  This is a weakness because if the clients know that anyone at Apple Blossom is  able to get their information then they might not want to do more business to 
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Unformatted text preview: protect their business. 3. Are write-offs of bad debts approved by an official not associated with the selling or credit functions? a. No, Approved by Brenda Robertson, the credit manager, who initials them. The same person who handles the credit of the company shouldnt be in charge of bad debts write-off because there should be a segregation of duties. 4. Are sales invoices checked as to prices and mechanical accuracy? a. No, Client considers it not cost effective. This can cause trouble with clients if someone believes another to be inaccurate. 5. Are customers billed by someone who has no other sales or accounts receivable responsibilities? a. No, billed by the bookkeeper, Don McKenna, who records journal entries. This also violates the control procedure of segregation of function....
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Apple Blossom Internal Control - AR & Credit Sales...

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