The following list presents various internal control strengths (S) or risks (R) that may be found in a company’s revenues and cash collection processes.
____ Credit is authorized by the credit manager.
_____ Checks paid in excess of $5,000 require the signatures of two authorized members of management.
_____ A cash receipts journal is prepared by the Treasurer’s department.
_____ Collections received by check are received by the company receptionist, who has no additional recordkeeping responsibilities.
______ Collections received by check are immediately forwarded unopened to the accounting department.
_____ A bank reconciliation is prepared on a monthly basis by the Treasurer’s department.
____ Security cameras are placed in the shipping dock.
____ Receiving reports are prepared on pre-printed, numbered forms.
_____ The billing department verifies the amount of customer sales invoices by referring to the authorized price list.
____ Entries in the shipping log are reconciled with the sales journal on a monthly basis.
____ Payments to vendors are made promptly upon receipt of goods or services.
______ Cash collections are deposited in the bank account on a weekly basis.
_____ Customer returns must be approved by a designated manager before a credit memo is prepared.
_____ Account statements are sent to customers on a monthly basis.
_____ Purchase returns are presented to the sales department for preparation of a receiving report.