Question

The internal auditor of a manufacturer is reviewing order-entry and shipping procedures. Figure represents the procedures in place.


Explanatory Notes A = Open Mail B = Prepare Invoice from Customer Order and Distribute C = Pick Goods to Extent Available and Forward to Shipping D = Prepare Bill of Lading and Label Cartons for Shipment E = Note Under shipments on Invoice # 3 after Goods are Shipped F = Complete Invoice Extensions Based on Actual Quantities Shipped G = Post to Ledger and Prepare Daily Sales Journal = Hand truck– Goods Movement
All documents used in the procedure are pre-numbered. There are many under shipments on customers’ orders, but goods not shipped are not automatically back- ordered.

Required
a. Identify deficiencies and/ or omissions in the control system for the order-entry and shipping functions.
b. Suggest improvements in the control system to remove the deficiencies you noted.
Use the following format in responding to this question:
a. Deficiency and/ or omission
b. Improvementssuggested


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  • CreatedFebruary 26, 2015
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