Dewland Meat Productions (Pty) Ltd (hereafter DMP) is situated in Devland, Soweto. DMP is a local butchery and produces different cuts of meat for several local spaza shops within Soweto, they also package the meat exactly according to the specifications of the client. DMP was recently in the news because of allegations made with regards to their use of meat that had reached its expiry date. They simply relabel the meat packages with a new expiry date, and then sell it again to their clients.

While you were busy with your investigation, you were contacted by a journalist from The Eleventh Hour, an investigative journalism television show. The journalist mentioned to you that a staff member of DMP, who wants to remain anonymous, informed the television show that the revenue and receipt process was ineffective. You decided that it would be a good idea to inspect and observe the revenue and receipts process and requested that the financial manager provide you with the system description. The financial manager provided you with the following system description regarding the revenue process.

To: UJ Student Internal Auditor

From: Dewald Steyn, Dewland Meat Productions (Pty) Ltd, financial manager

Subject: Revenue and receipts process

Credit sales:

1. Customers are allowed to buy on credit from DMP. If a customer would like to buy on credit, an account is opened and credit is granted immediately. DMP feels as if a credit application process is a waste of time.
2. As soon as an order is received, Sarah Smith writes down the order on any piece of paper she can find.
3. The only details the sales clerk require from the customer is the quantity of the meat they want to order.
4. The sale is then authorised by Sarah Smith and forwarded to the cold room.
5. On the receipt of an order, Johannes starts picking the correct quantity of meat that was ordered. The meat is then forwarded to dispatch to be packed, labelled and delivered.
6. The dispatch division then phones Nick, the driver, to collect the meat that needs to be delivered. He signs the orders attached to the packages he collects as proof of collection as no delivery notes are created.
7. Upon exiting the premises, Nick asks the security guards to open the gate for him, which they do without a security check.
8. Upon delivery Nick askes the customer to please sign the order that is attached to the packages, as there is no delivery note.
9. After delivery the accounting division will generate an invoice for the customer and all calculations on the invoice are independently reviewed for accuracy. The invoices are not recorded against the relevant debtor as per the request from the financial manager.

You are required to:

Identify the weaknesses from the credit sales process, and provide internal controls that should be implemented to ensure that these weaknesses are mitigated. (14)

Your answer should be in table format as indicated below:

Weakness

Internal Control