QUESTION $3(20$ Marks$)$ RideWell $($Pty$)$ Ltd wholesales bicycles, parts and accessories to the retail trade. Customers include the major chain stores, for example, Makro, Game, numerous independent bicycle dealers and other general retailers. The company has a turnover of around R$140$m and about $2000$ debtors. Both foreign and local purchases are made and customers are located mainly in South Africa but sales are also made in other African countries. The company$$s administrative offices are attached to the warehouse. All goods are received at$,$ or dispatched from, the warehouse. The company has a computerised perpetual inventory system with literally many hundreds of inventory items, that are each assigned an inventory item code and a narrative description in the Masterfile. The company does not make $$over the counter$$ sales. Sales are made to account holders only. The order clerk, Jazelle Roos, is located in her own office and is equipped with a terminal linked to the online enterprise management software, a telephone and direct fax line. She has $$read only$$ access to the inventory Masterfile and the debtors Masterfile, and for confidentiality purposes not all information on these masterfiles is available to her. All orders are directed to this office. Orders are received by phone, email, fax and through the post. Telephonic orders When a phone call comes in from a customer, it is directed to Jazelle by a phone queuing system. On receiving the call, Jazelle will greet the caller and enquire as to whether he is an account holder. If so$,$ she will request the customer$$s account number $($or company name$)$ that she will enter onto the system. If the number given by the customer is a match to a debtor on the debtors Masterfile, further details pertaining to the customer will appear on the screen and Jazelle will ask the caller to supply some of these additional details to $$validate$$ the customer. If the number given is not a match, no order can be taken. If the caller is not an approved customer, the caller will be referred to Judith Oldman, the credit manager, who will initiate the account application process. Customers that have forgotten their account numbers are also referred to Judith, who then initiates the account number recovery process. Debtors with a hold on their account When a customer$$s account details appear, there may be an on$-$screen message that conveys to Jazelle that the debtor$$s account is $$on hold$,$ meaning that no orders can be taken for that customer. The decision to place a hold on a customer$$s account will have been taken by Judith Oldman and Johan Els $($financial manager$)$ and the reason would be that the customer is no longer considered to be creditworthy. The hold is affected by the entry of a code into a designated field on the debtor$$s account in the Masterfile $($write access to this field is restricted to Judith and Johan and holds are logged for subsequent review by Brandon Nel the financial director$).$ If the account comes up with a hold on it$,$ Jazelle will inform the customer and transfer the call to Judith. The hold can only be lifted if Judith and Johan agree, after thorough investigation and inspection of supporting documents, such as latest financial statements and proof of payments for outstanding balances, that the customer$$s previous challenges have been resolved and may once again be considered creditworthy. Removal of the hold code is restricted to Judith and Johan. It must be supported by a signed motivation, and is logged for review by Brandon. $3\mathrm{.}1$ Identify the key controls present in the revenue and receipts cycle at RideWell $($Pty$)$ Ltd that lowers risk for this organisation to an acceptable level. $(10$ marks$)3\mathrm{.}2$ For each key control identified in the revenue and receipts cycle at RideWell $($Pty$)$ Ltd$,$ explain which risk the control is lowering to an acceptable level, e$.$g$.$ what would probably go wrong if the control was not in place? $(10$ marks$)$ Present your answer using the following structure: Key Control Risk What is the key control that lowers risk to an acceptable level? What would probably go wrong if this control was not in place?