Revenue System Flashcards
Order taken: Key risks
Customer cannot pay on a timely basis
Not recorded properly
Not fulfilled
Order taken: Key control objectives
Only supply customers likely to pay on a timely basis
Record orders correctly
Fulfil all orders
Order taken: Key control activities
Credit checks
Authorise credit limits
Review credit limits regularly
Check credit remaining before confirming orders
Use sequentially numbered order forms
Check inventory levels before confirming orders
Match customer orders with despatch notes and follow up unmatched orders
Goods despatched: Key risks
Incorrect goods despatched
Despatched but not recorded
Customer disputes goods received
Goods despatched: Key control objectives
Prompt
Correct customer
All orders despatched
All orders recorded
Goods despatched: Key control activities
Examine goods outwards for quantity, quality and condition
Agree to sales order
Record on sequentially numbered goods despatched notes (GDNs)
Match GDNs to invoices
Follow up on unlatched GDNs
Obtain customer signature on GDN copy
Invoice raised: key risks
Not raised
Inaccurate
Wrongly cancelled by credit notes
Invoice raised: Key control objectives
All goods despatched are invoiced
Raised accurately
Credit notes accurate
Credit notes only for valid reasons
Invoice raised: Key control activities
Use authorised selling prices to record invoices
Check quantity x price for accuracy
Check condition of goods returned
Record on goods returned notes
Authorise credit notes
Sale recorded: Key risks
Invoices and credit notes not properly recorded
Debts recorded when not recoverable
Sale recorded: Key control objectives
Only valid sales recorded
Correct amount
Correct period
Correct customer accounts
Identify potential bad debts in a timely basis
Sale recorded: key control activities
Sequence checks for invoices being recorded
Match cash receipts to invoices
Statements sent regularly to customers
Review and follow up overdue accounts
Authorisation of bad debt write offs/allowance
Reconciliation of receivables ledger with nominal ledger
Cash collected: Key risks
Receipts allocated to wrong customer
Delays in banking (causing cash lost)
Cash collected: Key control objectives
All receipts recorded correctly
All receipts banked promptly
Cash collected: Key control activities
Segregation of duties between recording and banking
Safe custody of receipt books, cash and cheques
Daily banking
Reconciliation of bank paying-in slips and cash book
Regular bank reconciliations
