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    ADITHYA KOVILI

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    224

    Uploaded by

    ADITHYA KOVILI
    4 views2 pages

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    4 views2 pages

    224

    Uploaded by

    ADITHYA KOVILI

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Control Deficiency Control Recommendation

    Customer Credit Limits are set by Receivables Credit limit should be set by a senior member
    Ledger Clerks of receivables department and not by the
    receivables ledger clerks
    Receivables Ledger Clerks are not sufficiently
    senior

    Limits may be set which are too high, leading to


    irrecoverable debts or too low leading to loss
    on sales
    Customer orders are given a number based on Sales orders should be sequentially numbered
    sales person own identification number on a regular basis a sequence check of orders
    should be undertaken to identify any missing
    These numbers are not sequential. Without orders
    sequential numbers it is difficult to identify
    missing orders and to monitor if all orders have
    despatched in a timely manner
    Sales Clerks give sales discounts to the All discounts to be granted to customers should
    customers maximum of up to 10% be authorised in advance by the responsible
    officials such as sales director.
    The Discount granted by sales staff are not
    being reviewed and could result in
    unauthorised discounts allowed
    Sales Clerks Manually enter the discount in The invoice system should be amended to
    invoice. prevent sales clerks from being able to
    manually enter sales discounts onto invoices.
    In addition a clerk could enter an incorrect level
    of discounts for a customer leading to the sales
    invoice being overstated and a loss of customer
    goodwill
    Receivable Ledger clerks set credit limits in An exception report of changes made should be
    customer data file. generated and reviewed by responsible officials

    Receivable Ledger clerks are not senior enough


    to set credit limits in the customer data files
    which may result in increase in Risk of Fraud
    Insufficient Copies of GDN The GDN Should be created in Four parts with
    one copy of the GDN Being sent to the ordering
    GDN has only send to the Warehouse, Finance department. The Second copy should be held in
    and with Customer. the warehouse and the third sent to the finance
    department and fourth sent to the Purchasing
    Failing to send a copy to the purchasing Department.
    ordering department means that it is not
    possible to monitor the level of unfulfilled
    orders.

    This could result in a significant levels of


    unfulfilled leading to stock outs and a
    consequent loss on sales.
    Secondment of Credit Controller Senior Management should consider recruiting
    credit controller to the Internal audit
    Maintaining an internal audit department is an Department.
    important control as it enables senior
    management to test whether controls are
    operating effectively within the company. If the
    team has shortage of credit controller this
    reduces the effectiveness of monitoring
    control.

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