ch 5 overview
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This 2 page Class Notes was uploaded by Ankit Patel on Friday October 7, 2016. The Class Notes belongs to 4310 at Georgia State University taught by Gary Smith in Fall 2016. Since its upload, it has received 5 views. For similar materials see Accounting Information Systems in Accounting at Georgia State University.
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Date Created: 10/07/16
Chapter 5 Supplemental Information – Simplified BPMN Model of a Simple Sales and Collection Process – Customer Not Shown (See IT and Internal Control Notes on Page 2. Understanding of the Model and Controls may be quizzed and tested on.) 10/8/16 1 Notes on IT and Internal Controls 1. Sales people cannot authorize new customer in an AIS; normally, authorization is done by the Finance Department. This is a segregation of duties issue. AIS users must be authorized to setup new customers. Authorizing new customers and setting credit limits based on receiving and processing credit information is a control strength. 2. Person processing sales orders must be authorized in AIS, and cannot set up new customers or change customer’s credit limit. This is a segregation of duties issue. The processor employee is not authorized to change purchase orders from customers. Sales order confirmations may be issued and sent to customers, which reduces error from shipping the wrong products and wrong quantities. Sales prices should be stored in AIS tables and should automatically be entered in the sales order when it is processed. Differences between the customer purchase orders and company sales orders should be followed up on with the customers. Access to edit sales price tables should be extremely limited. 3. Physical access to the warehouse, where products are stored, should be limited by a card swipe or other verification system; i.e. access to the warehouse should be authorized and limited. Access to the AIS to print and prepare shipping documents should be limited to authorized employees. Shipping employees should verify that goods to be shipped match goods ordered. The order cannot be modified in the AIS by authorized shipping employees. 4. Employees invoicing the customer should be authorized in the AIS. Shipping employees should not invoice the customer. This is a segregation of duties issue; custody of inventory assets and recording of the invoice should be separated. Invoicing of customers is normally done by Accounting Department personnel. The invoicing employee should verify that the order has been shipped and that invoice quantities equal order quantities. Invoicing should occur within a set number of days. Normally, orders shipped or delivered one day must be invoiced by the following day. 5. Invoicing customer and receipt of payment must be separated; recording of the invoice and custody of cash or checks cannot be done by the same person. The person recording payment in the AIS should be authorized in the AIS. 6. Deposit of cash and checks should be made intact, i.e. no cash or check(s) are removed from the deposit. The employees receiving payments, depositing the payment, and recording the payment in the AIS must not be the same person. This is a segregation of duties issue involving recording of transactions and custody of assets (cash and checks). The person recording the payments must be authorized in the AIS. A very strong internal control is for customers to send payment directly (by mail or electronic payment) to a bank lock box; in this case, employees do not handle payments received from customers. 10/8/16 2
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