Evaluate Controls For Each Of The Four Basic Activities In The Expenditure Cycle
12.6.
Create a questionnaire checklist that can be used to evaluate controls for each of the four basic activities in the revenue cycle (sales order entry, shipping, billing, and cash collections).
Required
* a.For each control issue, write a Yes/No question such that a “No” answer represents a control weakness. For example, one question might be, “Are customer credit limits set and modified by a credit manager with no sales responsibility?” * b.For each Yes/No question, write a brief explanation of why a “No” answer represents a control weakness.
Sales Order Entry 1. Are there data entry application controls in place?
This answer no represents weakness in that you risk inaccurate or incomplete customer orders.
Shipping …show more content…
Is there a periodic reconciliation of bank statements with records by someone not involved in cash receipts processing? 5. Is there a segregation of duties?
The answer no to either of these questions represents a threat in that there is a higher risk of fraud or theft.
13.5.
Use Table 13-2 to create a questionnaire checklist that can be used to evaluate controls for each of the basic activities in the expenditure cycle (ordering goods, receiving, approving supplier invoices, and cash disbursements).
Required
* a.For each control issue, write a Yes/No question such that a “No” answer represents a control weakness. For example, one question might be “Are supporting documents, such as purchase orders and receiving reports, marked ‘paid’ when a check is issued to the vendor?” * b.For each Yes/No question, write a brief explanation of why a “No” answer represents a control weakness.
Ordering Goods
Receiving
Is there recognition of purchase orders with receiving slips?
The answer no to this question represents a weakness in that receipt of orders could be incorrect resulting in goods not ordered or too much product.
Approving Suppliers Invoices
Are supplier’s invoices approvals done by a
Create a questionnaire checklist that can be used to evaluate controls for each of the four basic activities in the revenue cycle (sales order entry, shipping, billing, and cash collections).
Required
* a.For each control issue, write a Yes/No question such that a “No” answer represents a control weakness. For example, one question might be, “Are customer credit limits set and modified by a credit manager with no sales responsibility?” * b.For each Yes/No question, write a brief explanation of why a “No” answer represents a control weakness.
Sales Order Entry 1. Are there data entry application controls in place?
This answer no represents weakness in that you risk inaccurate or incomplete customer orders.
Shipping …show more content…
Is there a periodic reconciliation of bank statements with records by someone not involved in cash receipts processing? 5. Is there a segregation of duties?
The answer no to either of these questions represents a threat in that there is a higher risk of fraud or theft.
13.5.
Use Table 13-2 to create a questionnaire checklist that can be used to evaluate controls for each of the basic activities in the expenditure cycle (ordering goods, receiving, approving supplier invoices, and cash disbursements).
Required
* a.For each control issue, write a Yes/No question such that a “No” answer represents a control weakness. For example, one question might be “Are supporting documents, such as purchase orders and receiving reports, marked ‘paid’ when a check is issued to the vendor?” * b.For each Yes/No question, write a brief explanation of why a “No” answer represents a control weakness.
Ordering Goods
Receiving
Is there recognition of purchase orders with receiving slips?
The answer no to this question represents a weakness in that receipt of orders could be incorrect resulting in goods not ordered or too much product.
Approving Suppliers Invoices
Are supplier’s invoices approvals done by a