Problem 3 - Revenue Cycle: Shipping Controls

Read Chapters 6 and Chapter 7. You may find it helpful to review the assigned problems before reading chapter 7 in the ACL in Practice assignment.

Roger Company's policy is to not ship goods unless a valid purchase order has been received. However, based on information obtained during your walk through to confirm your understanding of processes and controls, you learned that occasionally a rush order is received via telephone and the goods are shipped before receiving the purchase order. Rush orders are only processed for existing customers. When rush orders are received the sales person taking the order completes a "Rush Order" form which is then approved by the sales department supervisor. The "Rush Order" form is then attached to the purchase order when it is received and the details of the two forms (i.e., product and quantity) are compared. To test the effectiveness of the controls around rush orders, you want to identify all instances where product is shipped before a purchase order is received. Using the Roger Company shipping file, determine the number of invoices related to orders that were shipped before a purchase order was received. (Hint: You can compare the shipping date and the order date using < or > signs in the If statement.)

Problem 4 - Revenue Cycle: Test of Separation of Duties

Possible misstatements that may occur during the cash receipts process result from cash receipts being received, but not recorded (which could facilitate embezzlement). A control technique that is used to mitigate the risk of such misstatements is to segregate the duties of the accounts receivable department, general ledger accounting records, and cash receipts. The employee who completed each duty is required to sign his/her initials, and evidence of this has been provided for you in the AR table. In each transaction, proper segregation of duties is accomplished when no two duties have been completed by the same person. Use ACL and the information from Roger Company AR table to determine in which transactions segregation of duties was not properly implemented. (Hint: You can do a MATCH function or 3 separate if, then searches.)