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Internal Controls Revenue & Receipt Cycle (Risks (Fake sales,…
Internal Controls Revenue & Receipt Cycle
Control Objectives : A;V;C;R;A;C;C
Risks
Fake sales
Inaccuracies in sales or delivery rec
Risky clients get credit
Wrong Prices;Disc etc
Unauth BD
Wrong Class
Cutt-off probs
Sales
A - Sales to CRworthy clients, withing CR Lmt; Auth Adjs; Gate control Enq CR procedure; Obs sigs; Obs gate control; Auth
V - All sales in books = sales that occured
Vouch SJ-DLN-ISO agree dets & auth
C - Sales = correct period (invoice from DLN) Mtc DLN-INV date; Mtc SJ-INV date
R - Correct Acc treatment of trans (SJ - DL - GL - TB) Recalc
A - No errors between invoices and DLNS etc & reviewed
Classification - Correct acc class Insp for interco & ext sales
Completeness - All sales occured recorded Mtc DLN-INV; Trace INV-SJ; Numerical seq DLNs&INVs
Receipts from debtors
V - Supp docs for all trans RCP-CRS-DPS; Agree dets
R&C - Pmts & Disc correct acc treatment Trace Pmts - DL - DAA - DTS; Agree dets
A - Adjs follow pol Recalc;Chk sigs;Enq MAN pol
C - Pmts & Disc based on rec date
A - Disc and pmts correct & reviewed Test C&C; Enq MAN auth procedure & chk sigs
C - All valid pmts rec with CRS; numeric RPS; Recon DC - DL
General Controls
Supervision and Review - MAN
Seg Duty
Rot duty
Stationery control
Scrut strange trans
Recalc and recast often