5.55Control Objectives and Procedures Associations

a. “Occurrence” Sales recorded, goods not shipped
b. “Completeness” Goods shipped, sales not recorded
c. “Authorization” Goods shipped to a bad credit risk customer
d. “Accuracy” Sales billed at the wrong price or wrong quantity
e. “Classification” Product line A sales recorded as Product line B
f. “Accounting” Failure to post charges to customers for sales
g. “Proper Period” January sales recorded in December

CONTROL PROCEDURES

  1. Sales order approved for credit
/ X
  1. Prenumbered shipping doc prepared, sequence checked
/ X / X
  1. Shipping document quantity compared to sales invoice
/ X / X / X
  1. Prenumbered sales invoices, sequence checked
/ X
  1. Sales invoice checked to sales order
/ X
  1. Invoiced prices compared to approved price list
/ X
  1. General ledger code checked for sales product lines
/ X
  1. Sales dollar batch totals compared to sales journal
/ X / X / X
  1. Periodic sales total compared to same period accounts receivable postings
/ X
  1. Accountants have instructions to date sales on the date of shipment
/ X
  1. Sales entry date compared to shipping doc date
/ X
  1. Accounts receivable subsidiary totaled and reconciled to accounts receivable control account
/ X
  1. Intercompany accounts reconciled with subsidiary company records
/ X
  1. Credit files updated for customer payment history
/ X
  1. Overdue customer accounts investigated for collection
/ X / X / X / X

5.55 EXHIBIT 5.551 Blank form for Students

a. Sales recorded, goods not shipped
b. Goods shipped, sales not recorded
c. Goods shipped to a bad credit risk customer
d. Sales billed at the wrong price or wrong quantity
e. Product line A sales recorded as Product line B
f. Failure to post charges to customers for sales
g. January sales recorded in December

CONTROL PROCEDURES

  1. Sales order approved for credit

  1. Prenumbered shipping doc prepared. sequence checked

  1. Shipping document quantity compared to sales invoice

  1. Prenumbered sales invoices, sequence checked

  1. Sales invoice checked to sales order

  1. Invoiced prices compared to approved price list

  1. General ledger code checked for sales product lines

  1. Sales dollar batch totals compared to sales journal

  1. Periodic sales total compared to same period accounts receivable postings

  1. Accountants have instructions to date sales on the date of shipment

  1. Sales entry date compared to shipping doc date

  1. Accounts receivable subsidiary totaled and reconciled to accounts receivable control account

  1. Intercompany accounts reconciled with subsidiary company records

  1. Credit files updated for customer payment history

  1. Overdue customer accounts investigated for collection