Internal Controls Section B (Risks and Recommendations) 2 Flashcards
(128 cards)
Risk for GDNs not given same number as order numbers they relate to?
If GDNs are missing and company fails to raise invoices in a timely manner, could lead to a loss of revenue
Control recommendation for GDNs not given same number as order numbers they relate to?
A sequence of check of GDNs should be undertaken to identify any missing despatch notes
Risk if sales order department don’t receive copu of GDN
Not able to monitor if orders are being fulfilled on a timely basis, which could result in a loss of revenue and customer goodwill
Control recommendation if sales order department don’t receive copu of GDN
GDN should be amended to a four-part with one copy going to sales department
Risk if additional staff are drafted to help sales clerks produce sales invoices?
Increase of mistakes being made to sales invoices
Control reccomendation if additional staff are drafted to help sales clerks produce sales invoices?
Only sales clerks should raise sales invoices - recruit more sales clerks
Risk if manual entry of discounts?
A clerk could forget to manually enter discount or input wrong amount, causing loss of customer goodwill
Control recommendation if manual entry of discounts?
Invoice system should be manded to prevent sales clerks from manually entering sales discounts onto invoices
Risk if customer statements not generated and being sent to customers?
Increases likelihood of errors and invoice disputes. Which leads to cash flow issues
Control recommendation for customer statements not generated and being sent to customers?
Should sent monthly customer statements and send them out promptly
Risk if trade receivables account only reconciled annually?
Errors can’t be spotted promptly. Meaning receivables are misstated
Control recommendation if trade receivables account only reconciled annually?
Trade receivables account should be reconciled on a montlhy basis. Then reviewed by an authorised employee
Risk that customer orders are given a number based on sales person’s own identification number?
Sequential numbers mean it’s difficult to identify missing orders. Which leads to a loss of customer goodwill
Control recommendation that customer orders are given a number based on sales person’s own identification number?
Sequence check of orders should be undertaken to identify any missing orders
Risk for when each till has the same login code?
If there are cash discrepancies within the register, difficult to ascertain which employees are responsible. Cash is easy to misappropriate
Control recommendation for when each till has the same login code?
Each employee is provided with a unique logon code
Risk for when tills are reconcilied to daily sales reading are performed in total for every till rather than each till separately
When exceptions arise, it is difficult to identify which till caused differences
Control recommendation for when tills are reconcilied to daily sales reading are performed in total for every till rather than each till separately
Reconciliation done on a till by till basis rather than in aggregate
Risk for when daily sales sheets are scanned and emailed to head office?
Possibility some sales sheets could be misplaced by restaurant manager
Control recommendation for when daily sales sheets are scanned and emailed to head office?
Daily sales sheets should be sequentially numbered and be sent to head office on a daily basis
Risk for cash is stored at safe where safe key is kept under their desk?
Risk of significant cash losses due to theft if access to safe key not carefully controlled
Control recommendation for cash is stored at safe where safe key is kept under their desk?
Current key lock safe should be replaced with a digital code. This code should be updated regularly
Risk for when cashier is responsible for several elements of cash receipts system?
There is a lack of segragation of duties and errors can’t be identified on a timely basis
Control recommendation for when cashier is responsible for several elements of cash receipts system?
Key roles should be split between different members of the finance team