2007_internal_control_revenue_and_cash_receipts_cycle team B

2007_internal_control_revenue_and_cash_receipts_cycle team...

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Date: Thu, 17 JAN 2008 7:42:53 +0000 From: "Darlene Wardlaw" <[email protected]> Subject: Understanding the Revenue Cycle Attachment: <<RevenueICQ.doc>> I’ve attached a Sales internal control questionnaire from another engagement that I think you can use for Apollo. You may want to talk to Karina Ramirez to get answers to the questions. 1. Complete the ICQ for Apollo. For “yes” answers, add a comment stating which department and clerk performs the function. For “no” answers, describe the possible “errors” or “frauds” that could occur because of the control weakness. 2. I’ve started a flowchart and listed some strengths and weaknesses, but had to leave before I could finish it. See if you need to add any more strengths and/or weaknesses that you find from the ICQ and narrative descriptions of the revenue cycle. DW
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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 credit manager is in the treasurers office  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. N/A  3. Is access to sales invoice blanks restricted? Yes They are in a lock box  4. Are pre-numbered bills of lading or other  shipping documents prepared or completed in  the shipping department? Yes They are prepared in the shipping dept Completeness assertion:  5. Are sales invoice blanks pre-numbered? Yes This controls duplication  6. Is the sequence checked for missing invoices? NA  7. Is the shipping document numerical sequence  checked for missing bills of lading numbers? N/A Accuracy assertion:  8. Are all credit sales approved by the credit  department prior to shipment? Yes They are kept in credit managers file  9. Are sales prices and terms based on approved  standards? Yes Kept in approved price file 10. Are returned sales credits and other credits  supported by documentation as to receipt,  condition, and quantity, and approved by a  responsible officer? N/A 11. Are shipped quantities compared to invoice  quantities? Yes By the shipping department clerk 12. Are sales invoices checked for error in  quantities, prices, extensions and footing, and  freight allowances, and checked with  customers’ orders? Yes By the A/R clerk 13. Is there an overall check on arithmetic  accuracy of period sales data by a statistical  or product-line analysis? Yes
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This note was uploaded on 09/14/2010 for the course ACC 429 taught by Professor Whitehurst during the Spring '10 term at Chattanooga State.

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2007_internal_control_revenue_and_cash_receipts_cycle team...

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