Control Deficiency Control Test of Control
Recommendation
Sales Ledger Clerks Credit limits should not Enquire with the Sales
sets the credit limit for be set by the sales ledger clerk as who can
a new customer. ledger clerk. The credit set the credit limit of
limit must be set by new costumer and
Sales ledger clerks are another senior when was the last time
not senior enough to personnel from the the credit limits were
decide and set the sales department. reviewed.
credit limit for a new These credit limits must
customer. be reviewed on a
regular basis by the
They may set credit same senior personnel.
limits too high or too
low leading to the
chances of
irrecoverable debt and
loss of sales
respectively.
Each sales order Sales order number Reperform the control
number is based on the should not only be the by undertaking the
salesperson’s own person’s own sequence check of the
identification number in identification number sales order. If there are
order to facilitate rather Sales order any gaps discuss it with
monitoring of sales number must be the sales ordering
staff performance. sequentially numbered. team.
On a regular basis a
The sales order sequence check must
numbers are not be performed on the
sequential. If the order sales order to ensure
number are not that none of them are
sequential then it will missing.
be difficult for freesia
co to identify any
missing orders and to
track and monitor
status of all orders.
If any orders are not
dispatched in a timely
manner, then it could
result in a loss of
costumer goodwill.
Each day Lily Shah, a There must proper Review the files of
finance clerk, posts the segregation of duties completed bank
bank transfer receipts where these three roles reconciliations and
from the bank are divided between identify the signature
statements to the bank three distinct and confirm that it is
ledger account and individuals from the not of Lily shah.
updates the list of finance department. If
individual customers. this is not practical
On a monthly basis, Lily then at least bank
performs the bank reconciliation must be
reconciliation undertaken by another
member of the finance
There is a lack of department, which
segregation of duties in must be evidenced by
cash receipt and bank the way of signature on
system. a monthly basis.
This will increase the
risk of error and fraud,
which will not be
identified on a timely
basis.
GRN are only sent to GRN should be made in Review the files of copy
the finance 3 parts and one copy of of GRN held in the
Department. GRN should be sent to purchasing department
the Ordering and review for the
If the GRN are not sent department and evidence that it has
to the Purchasing another copy must be been reconciled with
ordering department sent to the warehouse. orders and flagged as
then there would be no completed.
way to monitor A clerk from the
unfulfilled orders. ordering department
must reconcile the GRN
If there are unfulfilled with the order places
orders which are not on a regular basis to
identified on a timely identify any missing
basis it would cause orders and for those
stock-outs leading to reconciled must be
loss of sales. flagged as complete.
Camilla Brown, the The purchase ledger Audit team should
purchase ledger clerk, clerk should not only utilize test data
only utilizes document use document count procedures to ensure if
count controls when control rather he should input could be mase
inputting invoices into utilize information without application of
the purchases system. processing control like control totals.
Control total which
Document count ensures both
control confirms the completeness and
completeness of the accuracy of the input.
invoice numbers, but it
will not confirm the
accuracy and validity of
the input.
If the invoices are not
input correctly then,
suppliers might be paid
wrong amounts or they
might not be paid on
time which would lead
to loss of supplier
goodwill and withdraw
of credit facilities.
