{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

26201352 - shipping department receives a marked up sales...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
26201352 NADCo Revenue Case NADCo’s overall revenue cycle internal controls are effective. Cash receipts and Sales Order Entry had the highest effectiveness while accounts receivable and shipping had the weakest controls. Cash sales were effective however showed some weakness regarding checks and reconciliation. When accepting checks, cashiers do not ask for proper identification and the sales clerk does not reconcile receipts to the cash register tape. To correct this weakness, cashiers should ask for the customers drivers license when accepting checks. NADCo has a very effective credit policy. The Treasurer must approve all new customers and uses external credit agency. The one weakness is that the cashier, who works in cash receipts, also approves the bad debt write-offs, creating an ineffective control. NADCo should have a person uninvolved with cash receipts and sales approve bad debt write offs. Shipping internal controls are weak because there is no formal shipping report. The
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: shipping department receives a marked up sales order from the warehouse with the quantities picked recorded on the sales order. Quantities on the sales order are recounted and compared to the physical count however, the shipping clerk does not match goods received to the item descriptions, making the control less effective. The shipping department needs to have a formal shipping document and make sure the shipping clerk also matches item descriptions, not only quantities. Accounts Receivable has the weakest control. The A/R system does not match quantities to the shipping report nor per item price to the sales order. Accounts Receivable aging report is prepared but its unclear how often. To correct this weakness, NADCo should alter the A/R system, insuring that it will match quantities to the shipping report and per item price to the sales order....
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern