Tài liệu FINANCIAL SYSTEMS & AUDIT pptx

Sales cycle summaryCustomer Order Despatch / fulfillment Invoice Receipts References of credit checked Match Documents sequenced Check Exception reports Cash with order Review Ageing Wri

FINANCIAL SYSTEMS & AUDIT

SALES CYCLE

Sales cycle summary

Customer Order

Despatch /

fulfillment

Invoice

Receipts

References of credit

checked

Match Documents sequenced Check Exception reports

Cash with order Review Ageing Write offs authorized Segregation of duties Control accounts

Objectives of control

• Sales are made to valid customers

• Sales are recorded accurately

• All sales are recorded

• Cash is collected within a reasonable period

Process Risk Possible control Procedure

Order received • Order might be

forgotten

• Valid order ?

• Wrong goods / services

• Customers unlikely to pay

• Goods delivery terms cannot be met

• Product not available

• Cheap prices given to friends

1 “Open” order file which is regularly checked

2 Exception report of unfulfilled orders

3 All orders confirmed in writing

4 Carry out credit check for the new customers

5 Establish credit limit, which are reviewed regularly

6 Inventories checked before orders accepted or suitable supply chain for JIT ordering

Sales Cycle…continue

Process Risk Possible control Procedure

Order received •Order might be

forgotten

•Valid order ?

•Wrong goods / services

•Customers unlikely to pay

•Goods delivery terms cannot be met

•Product not available

•Cheap prices given to friends

7 Standard list of delivery times, prices, discounts that can be given

8 Discounts have to be authorized by responsible official

9 Pricing and discounts held centrally

in IT system

10 Changes to authorized prices and discount can only be made by authorized person

Sales Cycle…continue

Process Risk Possible control Procedure

Goods despatched

(or service

performed)

•Wrong items sent

•Poor quality items

•Goods are being stolen

•Customer does not received delivery

1 Despatch instruction generated from order

2 Despatch instruction is used to pick products from stores

3 All despatches checked against despatch instruction before they leave warehouse

4 Warehouse manager signs out despatch, or carries out spot checks

as appropriate

5 A named person at customer is required to sign for goods, confirming receipt

6 Compare error rate across delivery driver, to spot possible thefts

Sales Cycle…continue

Process Risk Possible control Procedure

Invoice Raised •Wrong items /

prices

•Invoice does not add up

•Error in posting in nominal ledger

•Error in posting to Receivables ledger

•Delay in posting

1 Invoice raised as part of the same process that generated despatch instruction from order

2 Integrated accounting systems ensures correct posting to revenue, receivables and sales tax accounts

3 Regular statements sent to customers

4 Centrally held prices and discounts

5 For manual systems

 Random invoices arithmetic checked

 Control accounts reconciled on regular basis

 Regular statements sent to customers

 Sequence checks to ensure complete posting

 Sequence check from despatch instruction

to ensure complete invoicing

Sales Cycle…continue

Process Risk Possible control Procedure

Payment received •Errors in posting to

nominal ledger

•Payments is stolen

•Errors in posting to Receivables ledger

•Settlement discounts wrongly claimed

1 Customers are encouraged to apy

by bank transfer

2 Credit card payments accepted and procedures lain down by credit card companies re-identify checks, etc followed

3 Receipts allocated against specific invoices

4 All settlements discounts checked

to ensure valid

5 Bank reconciliations to spot delays

in banking

Sales Cycle…continue

Process Risk Possible control Procedure

Payment

received

•Delay in banking

•Customer does not pay /slow

1 Control accounts reconciled

2 Aged analysis reviewed regularly by someone with suitable degree of responsibility and independence

3 Bad debts written offs authorized by someone with suitable degree of responsibility and independence

4 Exception reporting of overdue amounts

5 Credit control functions to chase slow payers

6 For cash sales – the use of tills, preferably with in-built safeguards and linked to the main accounting systems

7 Where there are large volumes of receipts by mail and the above control is insufficient:

 The mail is opened by two people, both independent

of Accounts

 List is prepared of all money received

 List is passed to Accounts

 A further non Accounts employee banks money

Sales Cycle…continue

Process Risk Possible control Procedure

Credit given •Credit used to hide theft

•Wrong amount credited

•Credit given to friends

•Damaged returns put back

in inventory

•Return accounted for as purchases

•Returned goods stolen

•Error in posting

1 All credit notes to be authorized by manager

2 Credit note referenced back to original invoice

3 Goods to be returned and checked

to ensure credit deserved

4 Credit note sequence reviewed to ensure no unauthorized credits being awarded

5 Booking systems for returns with separate holding area

• All documents should be pre-numbered in a

sequence, so that completeness and validity

are easy to verify

• All documents should be cross – referenced, so that it is easy to trace from the original order through the accounts

• The awarding of credit is a particularly

dangerous area, as the easiest way to hide

stolen money is to give customers credit

instead

Common fraud

• Money received is stolen by staff

 Stolen money is hidden by false entries to the Receivable ledger

 Receipts of money should be organised by different staff from those able to make entries to the Receivable Ledger

• In Shops, money stolen by staff

 Cash, so more attractive /easy to steal

 In Mc Donald's, staff have uniforms without pockets

 Cash register should need keys to open

 These keys identify the member of staff

 Cash register require staff to enter products rather than

amounts – to stop overcharging

 Price list should be easily accessible to customers – to avoid overcharging

 Reconcile till record to cash therein