2 TAS LLP (TAC) is engaged in the production and sale of luxury toiletries. They have been...
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2 TAS LLP (TAC) is engaged in the production and sale of luxury toiletries. They have been trading for over 20 years and the company year-end is December 31, 2021. TAC sells goods to merchant customers through its own website; this is 60% of its income. The rest of the income comes from contracts for the supply of toiletries to hotels. Below is a description of the sales system. Hotel Income Hotel income consists of four major customers. TAC has one salesperson, Valery, who is responsible for all aspects of this revenue stream. Valery receives customer orders, issues invoices, and processes payments. When invoicing the sales system usually inserts online trading customer prices for products. However, each hotel customer has contract prices that are lower than online prices, and therefore Valeriy manually edits invoices before submitting them. Revenue from customers is set in the main sales ledger file after passing the appropriate credit checks, and the credit limit is set in this New CFO stage. Customers place online orders within their predetermined credit, they receive an email confirmation and the Sales Order interacts with the shipping system. The order number is linked to the customer's account. Item shipped at Price Daily with a shipping notice that refers to a sales order number but is not sequentially numbered.
TAC used to send the goods through a reliable national courier company. However, in order to cut costs, they switched to a cheaper local counter, and orders were delivered to customers late, all offers or sales discounts: wt master Trade customer invoices are automatically generated by the system on the day of online ordering. inserted in accordance with the rates of the site. Sometimes TAC does not file data that needs to be changed to ensure that correct prices are used on invoices. This task is usually performed by a senior sales ledger clerk. Reports on income and receivables Monthly reports are sent to hotel customers; a number of trading clients have requested monthly reports and TAC is reviewing this request. The company only reconciles the sales ledger at the end of December in order. to check the balance at the end of the year.
Required:
1. Identify and explain SEVEN weaknesses in the sales system and provide recommendations for correcting each. shortcomings
2: Describe the main procedures that the auditor must perform to confirm TAC revenue.
Related Book For
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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