Internal Control Deficiencies

Question 1

Sales Clerk Receives customer orders

Answer 1

No Deficiency - should receive the order

Question 2

Sales Clerk has a copy of sales order in addition to the original

Answer 2

No deficiency - should have a copy

Question 3

Sales Clerk prepares sales order without shipping advice

Answer 3

No deficiency - No shipping document will be present at this point since the goods have not been shipped

Question 4

Warehouse clerk Initiates posting to inventory records by preparation of shipping advice

Answer 4

Deficiency

Question 5

Warehouse clerk Releases merchandise to customers before proper approvals of customers’ credit.

Answer 5

Deficiency

Question 6

Warehouse clerk Does not retain a copy of the shipping advice for comparison with receipt from carrier.

Answer 6

Deficiency

Question 7

Warehouse clerk Forwards invoice to customer

Answer 7

No Deficiency - they don’t do this???? double check this

Question 8

Bookkeeper A Authorizes customers’ credit and prepares source documents for posting to customers’ accounts.Authorizes customers’ credit and prepares source documents for posting to customers’ accounts.

Answer 8

Deficiency

Question 9

Bookkeeper A Prepares invoices without notice that the merchandise was actually shipped and the date it was shipped

Answer 9

Deficiency

Question 10

Bookkeeper A Prepares invoices without access to customers’ checks

Answer 10

No Deficiency - Invoice should be prepared prior to receiving customer’s checks

Question 11

Bookkeeper A Authorizes write-offs of customer accounts receivable and authorizes customers’ credit

Answer 11

Deficiency

Question 12

Bookkeeper A Authorizes write-offs of customers accounts but does not post the sales journal

Answer 12

No Deficiency

Question 13

Collection Clerk Receives customers’ checks and posts cash receipts journal

Answer 13

Deficiency

Question 14

Collection Clerk Stamps customers’ checks “For Deposit Only.”

Answer 14

No Deficiency - Strength of I/C

Question 15

Collection Clerk Lists of checks

Answer 15

No Deficiency - Strength of I/C

Question 16

Collection Clerk Does not compare customer checks with subsequent cash disbursement to replenish inventory.

Answer 16

No Deficiency - this would not be expected

Question 17

Collection Clerk Does not deliver checks excluded from the deposit to an employee independent of the bank deposit for review and disposition.

Answer 17

Deficiency

Question 18

Collection Clerk Initiates posting of receipts to subsidiary accounts receivable ledger and has initial access to cash receipts.

Answer 18

Deficiency

Question 19

Collection Clerk Does not deposit cash receipts promptly.

Answer 19

Deficiency

Question 20

Collection Clerk Reconciles bank statement and has initial access to cash receipts

Answer 20

Deficiency