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March 8, 2012February 17, 2019 When it comes to shipping products, processing sales orders, invoicing products, processing sales adjustments and product returns, processing sales and processing cash receipts, you should be sure there is adequate segregation of duties among those who:
An easy way to check for adequate segregation of duties is to take the above list and place a name next to each process to see where there may be too many duties on one person’s plate. You should then look for a single person who has the ability to abuse their power within a system or that can make significant errors without it being detected. Additionally, depending on your company’s size, functions and designations may vary. When duties cannot be separated, compensating controls should be in place. These controls should be designed to reduce the risk of an existing or potential control weakness. If you are unsure of a good way to segregate these duties in a smaller organization, you may consider asking your CPA for suggestions. Henry+Horne Segregation of duties means keeping particular job duties separate by assigning them to different staff members. This system helps to prevent mistakes and fraud. Much like the government's system of checks and balances, the separation of duties allows different staff members or departments to question each other in order to analyze and rectify mistakes. Segregation of duties is crucial in sales departments due to the continual processing of funds. Specific Functions
Preventing Dishonesty
Catching Errors
Methods
Alternatives
Which function should verify that the goods sent from the warehouse are correct in type and quantity?'Goods receiving' is the function of checking items delivered to the business, either coming in as new stock or as supplies. This includes inspecting the quality, condition, and quantity of any incoming goods, and allocating them to a space in the warehouse.
Which function or department reconciles and posts to the general ledger accounts?The AR clerk prepares a summary of changes in account balances, which is sent to the general ledger department. Upon receipt of the journal voucher and account summary from cash receipts and AR, respectively, the general ledger clerk reconciles the information and posts to the control accounts.
What specific internal control procedure would prevent the shipping clerk from taking goods from the storeroom?What specific internal control procedure would prevent the shipping clerk from taking goods from the storeroom and sending them to someone who had not placed an order? Shipping clerk should not have access to the storeroom.
What are the risks associated for revenue processes?Common risks associated with the revenue cycle include the authorization or accuracy of sales contracts with clients. You must ensure prices are quoted correctly following your sales pricing policy.
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State two specific functions or jobs that should be segregated in the sales processing system
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