week 5 - 10. 3 What internal control procedure(s) would...

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10. 3 What internal control procedure(s) would provide protection against the following treats? If more than one control procedure could be used to solve a problem rank the alternatives in terms of their effectiveness. a. Control procedures that can be put into place, is the inventory should be put into a locked and secure location. All inventory transfers should be documented in an inventory tracking system. b. Data entry edit controls. The system should automatically be able to look up a customer through the customer master file to eliminate data entry errors. c. Credit limits should be applied to customers Credit limits should be relooked at every few months. If customers are not paying and our are slow paying, credit should be revoked. d. This sounds like the credit manager is involved with fraudulent activity. The credit manager should authorize a credit memo upon the return of goods so that the customer can be refunded. If the products are damaged by the customer and or not returned a refund memo should not be issued. e. Back up files should be kept and compared on a daily basis to everyday activities such as writing of a customer’s account. There should be a segregation of duties to make adjustments not just one single person. f. Billing errors can be located when reconciling the quantities on the packing list with those on the invoice or sales order. g. Cash collections threat. A lockbox arrangement and or an EFT or FEDI system should be used. Payments should be sent directly to a cashier. h. Cash collections – this theft could have been avoided if payments were not allowed to be made in cash. Payments could only be made by EDI, FEDI or check. i. A record of the receipt printed should automatically be recorded into the system. The amount of cash received along with the cash sales for the day should be reconciled to reveal missing funds. Many stores have incentives for customers that pay cash… such as do not get a receipt receive 20 dollars. j. Segregation of the shipping and the billing functions should eliminate this problem.
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week 5 - 10. 3 What internal control procedure(s) would...

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