Revenue System Flashcards
What are the risks associated with the receipt of a customer order?
Customer orders are not received or properly recorded (sales understated)
Customers unable to pay
Orders are accepted from customers with no inventory available for despatch
What are the internal control procedures used with the receipt of customer order?
Prenumbered documents
Checks performed on completeness of sequence of pre-numbered docs
Credit references obtained for new customers
Credit limits should be checked
Increase in credit limits should be authorised by credit controller
Availability of inventory should be checked
What are the risks associated with the despatch of customer order?
Goods despatched are not “correct” goods ordered
Goods despatched are poor quality
What are the internal control procedures used with the despatch of customer order?
Goods despatched should be accompanied by pre-numbered goods despatched note (GDN)
GDN should be matched to original order
Quality control check performed on random sample of despatches
Customer should sign and return GDN as acceptance of goods
Signed GDN should be given to accounts dept for invoicing
What are the risks associated with the invoicing of customer order?
Customers are not invoiced/invoiced incorrectly
Sales invoices not recorded in ledgers
Items posted incorrectly to sales ledgers
What are the internal control procedures used with the invoicing of customer order?
Sales invoices should be prenumbered
All invoices should be posted to sales ledger
Regular checks made on completeness of prenumbered invoices, GDN, orders
Statements sent to customers confirming balances outstanding
Overdue accounts followed up
What are the risks associated with collection of cash?
Customers do no pay or pay late
Funds received from customers are incorrectly allocated
Cash/cheques sent through the post go missing/not banked/ not recorded
What are the internal control procedures used with the collection of cash?
Post should be opened in pairs
Segregation of duties
All cheques should be recorded and banked promptly
Bank reconciliation should be performed on monthly basis
