Date: Thu, 17 JAN 2008 7:42:53 +0000
From: "Darlene Wardlaw"
Subject: Understanding the Revenue Cycle
I’ve attached a Sales internal control questionnaire from another engagement that I think you can use for Apollo. You may want to talk to Karina Ramirez to get answers to the questions.
1. Complete the ICQ for Apollo. For “yes” answers, add a comment stating which department and clerk performs the function. For “no” answers, describe the possible “errors” or “frauds” that could occur because of the control weakness. 2. I’ve started a flowchart and listed some strengths and weaknesses, but had to leave before I could finish it. See if you need to add any more strengths and/or weaknesses that you find from the ICQ and narrative descriptions of the revenue cycle.
Internal Control Questionnaire—Sales Transaction Processing
| |Yes, No, N/A | | |Assertions and Questions | |Comments | | | |Occurrence assertion: | | 1. Is the credit department independent of the sales | | | |department? | | | | 2. Are sales of the following types controlled by the | | | |same procedures described below? Sales to employees, COD | | | |sales, disposals of property, cash sales, and scrap | | | |sales. | | | | 3. Is access to sales invoice blanks restricted? | | | | 4. Are pre-numbered bills of lading or other shipping | | | |documents prepared or completed in the shipping | | | |department? | | | | | |Completeness assertion: | | 5. Are sales invoice blanks pre-numbered? | | | | 6. Is the sequence checked for missing invoices? | | | | 7. Is the shipping document numerical sequence checked | | | |for missing bills of lading numbers? | | | | | | | |Accuracy assertion: | |...
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