Group Week 4 - Team C 1 Week 4 Team Assignment University...

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Team C 1 Week 4 Team Assignment University of Phoenix Samantha Bradley, Nicole Hamilton, Marie Bennwitz, Jennifer Dickey, and Jason Noorani ACC/491 April 4, 2011 Professor S. Alarcon, Jr.
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Team C 2 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 A credit manager resides in treasury department 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. NA There is no information provided in the case on this. 3. Is access to sales invoice blanks restricted? Yes The sales invoice forms are restricted as they are kept in a locked closet in the billing department, and sheets in the numerical sequence are removed only for billing clerks’ immediate loading onto the computer printer . 4. Are pre-numbered bills of lading or other shipping documents prepared or completed in the shipping department? No Invoices are not pre-numbered until they reach the billing department where the billing clerk produces a four-copy sales invoice on a prenumbered invoice form. When sales are approved copies of the invoice are sent to shipping department where quantities and items are checked again. In cases where customers are not on the premises, a prenumbered bill of lading is filled out in two copies for shipments by contract truckers. Completeness assertion: 5. Are sales invoice blanks pre-numbered? Yes Performed by AR clerk 6. Is the sequence checked for missing invoices? Yes Yes. The Accounting and Control Procedure Manual states ‘When sales invoices are recorded, the numerical sequence shall be checked by an accounts receivable clerk, and missing invoices must be located and explained.’ 7. Is the shipping document numerical sequence checked for missing bills of lading numbers? No The numerical sequence is not checked as the according to the internal control, there are existing sales transactions with missing bills of lading which further suggests improperly recorded sales.
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Team C 3 Accuracy assertion: 8. Are all credit sales approved by the credit department prior to shipment? Yes All credit sales are approved by the credit manager prior to shipment. The credit manager checks the customers’ accounts receivable balances and other credit file information using a computer-based inquiry system. Only if credit is approved, the credit manager signs the sales order, otherwise the customer is asked to pay in advance. 9. Are sales prices and terms based on approved
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Group Week 4 - Team C 1 Week 4 Team Assignment University...

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