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Revenue and receipt cycle - Coggle Diagram
Revenue and receipt cycle
Functions
The dispatch function
The invoicing function
The ordering function
The revenue recording function
The credit management function
controls within the receipts
Basic controls
Controls over bank account
Controls over cash
Documents present
internal sales order
Sales invoice
Delivery note
Picking slip
Customer order
Price list
Credit application form
Back order note
Risks within the receipts from debtors
Kiting
lapping or rolling
control objectives
Completeness
Classification
Cut off
Vadility
Accuracy
Authorisation
Recording
Internal controls
All sales need to be recorded and nothing should be left out
All sales are authorised according to the company's policy
All sales are recorded correctly
Substantive procedures
Occurrence – recorded transactions have occurred and they pertain to the company
Completeness – all sales should have been recorded, have been recorded
Classification – all sales have been recorded in the proper accounts
Accuracy – the amounts of sales have been recorded appropriately
Weaknesses
Lack of segregation of duties
Writing an order on a piece of paper
Not counting the goods before they leave the premises
Test of control
Observe the security guards counting the goods and comparing with the picking slip
Inspect if an internal sales order was generated
Inspect if credit purchases are approved