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Unformatted text preview: 12-461. Transactions over $10,000 must be approved by a credit manager for several reasons. The most obvious reason is that this is quite a large transaction, and not just anyone should be able to make a transaction this large. If this control is not implemented correctly, there could be a lot of large transactions that are no good, resulting in losses for the company. An auditor would want to do an inquiry to confirm and talk with personnel who perform the control about the procedures and processes.2.This could lead to misstatements as sales managers may or may not document what they have approved, which could cause problems on financial statements. In this case, the auditor may want to observe the personnel performing the actions.3.By pre numbering the shipping documents, there is room for error in what actually happens. Again, the auditor would want to do an inquiry to confirm and talk with happens....
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- Spring '10