Recommending Controls
You
will have the opportunity in this Discussion to recommend sound
internal controls over sales invoices and receivables. If controls are
not in place over these functions, companies are susceptible to errors,
fraud, and losses.
In the following scenarios, recommend internal controls that need to be in place to eliminate the problems described:
- An
inexperienced clerk does not have the knowledge to properly prepare
sales invoices. He is confused about the actual items shipped. As a
result, the clerk has been preparing invoices at prices that were below
the company’s sales prices. - During
your audit, the controller approaches you about a problem with missing
invoices. He thinks that these missing invoices were never recorded in
the system, which results in the accompanying receivables not being
recorded either. He reads the monthly sales data and calculates that the
company has faced significant losses as a result.
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