Please study carefully figure 20

1. Identify at least three weaknesses in Newton Hardware's revenue cycle. Explain the resulting threat, and suggest methods to correct the weaknesses.

2. Identify ways to use IT to streamline Newton's revenue cycle activities. Describe also the control procedures required in the new system.

5H COLLECTIONS THE REV ENUE CYc amily Support Center's bank statement. At this time, the accountant also reviews the iles and sends a follow-up letter to those people who have not yet fulfilled their pledge f pledges. work. Employces are permitted to surf the web during lunch hours. Each full Each employee has a computer workstation that is connected to the internal net system, so that anyone can fill in for someonce access to the charity's accounting on vacation. Each Friday, the accountant makes a backup copy of all conputerfilek Thebuakup oopy is stored in the office er REQUIRED a. Identify two major control weaknesses in the Family Support Center's cash receipts procedures. For each weakness you identify, suggest a method to correct that weak- ness. Your solution must be specific-identify which specific employees should do what. Assume that no new empioyees can be hired b. Describe the IT control procedures that should exist in order to protect the Family Support Center from loss, alteration, or unauthorized disclosure of data. ware Company REQUIRED 0 Figure 20 depicts the activities performed in the revenue cycle by the Newton Hard 0 Figurompany a. a. Identify at least three weaknesses in Newton Hardware's revenue cycle. Explain the resulting threat, and suggest methods to correct the weakness. control procedures required in the new system. (CPA Examination, adapted) b. Identify ways to use IT to streamline Newton's revenue cycle activities. Describe the Employee Sales Clerk Activity Performed (sequential, left-to-right across all rows) Credit Memo Order Warehouse Fick & Order Shipping Clerlk Ship to Credit HO Accountant Prepare & Mail Invaice to Customer Update Accounts Raceivable Deposi Remittances Receivable in Bark Cash Clerk Receive & bReconcilo Bonk Remittance For Deposit Customer FIGURE 20 Newton Hardware Company Revenue Cycle Procedures