Internal controls Recording

Question 1

control for the wrong customers account updated when making a sale or cash received

Answer 1

Prepare customer statements and send them out for confirmation

Retain customer remittance advices ( customer notes sent to suppliers notifying a payment has been made)

Question 2

test of control for the wrong customers account updated when making a sale or cash receive

Answer 2

Review a sample of customer statements

Trace a sample of sales from the invoices/ remittance advices and check customer accounts.

Question 3

control for sales recorded in the wrong period

Answer 3

Review goods delivery notes around the year end to ensure sales recorded in correct period

Question 4

test of control for sales recorded in the wrong period

Answer 4

Re-perform the review (obtain goods delivery notes around the year end and check they were recorded in the right period.)

Question 5

control for irrecoverable debts not identified (no allowance created)

Answer 5

Review ageing receivables and investigate reasons for old debts

Analytical review of changes in receivable days

Question 6

test of control for irrecoverable debts not identified (no allowance created)

Answer 6

Re-perform analytical review of receivable days.

Question 7

control for debts wrongly written off

Answer 7

Authorisation required for all write offs

Question 8

test of control for control for debts wrongly written off

Answer 8

Review debts written off in the year and check for supporting authorisation

Question 9

control for credit notes not recorded properly

Answer 9

Have standard credit note form.

Sequentially number them and agree them with supporting documentation

Question 10

test of control for credit notes not recorded properly

Answer 10

Review credit notes raised and that they have supporting documentation and authorised.