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Occurrence/Validity;
Authorisation;
Completeness;
Accuracy;
Recording;
Classification; and
Cut off.
Supervision and review
Segregation of duties
Rotation of duties
Personnel take leave regularly
Management control
Internal audit
Sufficient stationery control
Scrutinise all records and documents for extraordinary items
Test castings and calculations on all selected items, documents and ledger accounts
Occurrence/validity All recorded credit sales are valid and supported by proper documentation.
Authorisation All credit sales are authorised according to company policy
Completeness All valid credit sales are recorded and nothing is left out.
Accuracy All credit sales are recorded on sales invoices at the correct quantity, price and are arithmetically correct
Recording All credit sales invoices are recorded correctly
Classification All sales are correctly classified according to the nature thereof
Cut off All sales transactions are recorded in the correct reporting period
Occurrence/Validity: All payments and discount on debtors' accounts are valid and are supported by appropriate documentation
Completeness: All valid payments received from debtors are recorded.
Accuracy: All payments and discounts accounted for at the correct amount and discounts are accurately calculated.
Authorisation: All credit adjustments, e.g. credit notes, discounts, etc., are authorised according to company policy
Recording & Classification: All payments and discounts are correctly classified and recorded
Cut off: Payments and discounts are recorded in the correct period to which it relates. Day the risks and rewards of ownership have transferred to customer
The ordering function - record orders from customers and initiate action to fill them;
The dispatch function - fill accepted orders promptly and accurately and ensure only authorised orders are acted on;
The invoicing function - notify customer promptly of amounts due for goods supplied;
The revenue recording function – record sales made and to raise the corresponding debtor promptly
The credit management function - limit the loss from bad debts and to encourage debtors to pay promptly.
Basic controls
Control over bank account
Control over cash