Tài liệu FINANCIAL SYSTEMS & AUDIT pptx

FINANCIAL SYSTEMS & AUDIT SALES CYCLE Sales cycle summary Customer Order Despatch / fulfillment Invoice Receipts References of credit checked Match Documents sequenced Check Exception reports Cash with order Review Ageing Write offs authorized Segregation of duties Control accounts Objectives of control • Sales are made to valid customers • Sales are recorded accurately • All sales are recorded • Cash is collected within a reasonable period Process Risk Possible control Procedure Order received •Order might be forgotten •Valid order ? • Wrong goods / services • Customers unlikely to pay • Goods delivery terms cannot be met •Product not available •Cheap prices given to friends 1. “Open” order file which is regularly checked 2. Exception report of unfulfilled orders 3. All orders confirmed in writing 4. Carry out credit check for the new customers 5. Establish credit limit, which are reviewed regularly 6. Inventories checked before orders accepted or suitable supply chain for JIT ordering Sales Cycle…continue Process Risk Possible control Procedure Order received • Order might be forgotten •Valid order ? • Wrong goods / services • Customers unlikely to pay • Goods delivery terms cannot be met •Product not available • Cheap prices given to friends 7. Standard list of delivery times, prices, discounts that can be given 8. Discounts have to be authorized by responsible official 9. Pricing and discounts held centrally in IT system 10. Changes to authorized prices and discount can only be made by authorized person Sales Cycle…continue Process Risk Possible control Procedure Goods despatched (or service performed) • Wrong items sent • Poor quality items •Goods are being stolen • Customer does not received delivery 1. Despatch instruction generated from order 2. Despatch instruction is used to pick products from stores 3. All despatches checked against despatch instruction before they leave warehouse 4. Warehouse manager signs out despatch, or carries out spot checks as appropriate 5. A named person at customer is required to sign for goods, confirming receipt 6. Compare error rate across delivery driver, to spot possible thefts Sales Cycle…continue Process Risk Possible control Procedure Invoice Raised •Wrong items / prices • Invoice does not add up •Error in posting in nominal ledger • Error in posting to Receivables ledger • Delay in posting 1. Invoice raised as part of the same process that generated despatch instruction from order 2. Integrated accounting systems ensures correct posting to revenue, receivables and sales tax accounts 3. Regular statements sent to customers 4. Centrally held prices and discounts 5. For manual systems  Random invoices arithmetic checked  Control accounts reconciled on regular basis  Regular statements sent to customers  Sequence checks to ensure complete posting  Sequence check from despatch instruction to ensure complete invoicing Sales Cycle…continue Process Risk Possible control Procedure Payment received • Errors in posting to nominal ledger •Payments is stolen • Errors in posting to Receivables ledger •Settlement discounts wrongly claimed 1. Customers are encouraged to apy by bank transfer 2. Credit card payments accepted and procedures lain down by credit card companies re-identify checks, etc followed 3. Receipts allocated against specific invoices 4. All settlements discounts checked to ensure valid 5. Bank reconciliations to spot delays in banking Sales Cycle…continue Process Risk Possible control Procedure Payment received • Delay in banking •Customer does not pay /slow 1. Control accounts reconciled 2. Aged analysis reviewed regularly by someone with suitable degree of responsibility and independence 3. Bad debts written offs authorized by someone with suitable degree of responsibility and independence 4. Exception reporting of overdue amounts 5. Credit control functions to chase slow payers 6. For cash sales – the use of tills, preferably with in- built safeguards and linked to the main accounting systems 7. Where there are large volumes of receipts by mail and the above control is insufficient:  The mail is opened by two people, both independent of Accounts  List is prepared of all money received  List is passed to Accounts  A further non Accounts employee banks money Sales Cycle…continue Process Risk Possible control Procedure Credit given • Credit used to hide theft • Wrong amount credited •Credit given to friends • Damaged returns put back in inventory •Return accounted for as purchases • Returned goods stolen •Error in posting 1. All credit notes to be authorized by manager 2. Credit note referenced back to original invoice 3. Goods to be returned and checked to ensure credit deserved 4. Credit note sequence reviewed to ensure no unauthorized credits being awarded 5. Booking systems for returns with separate holding area . FINANCIAL SYSTEMS & AUDIT SALES CYCLE Sales cycle summary Customer Order Despatch /. process that generated despatch instruction from order 2. Integrated accounting systems ensures correct posting to revenue, receivables and sales tax accounts