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12 terms

Revenue Cycle Threats and Controls

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Incomplete or inaccurate customer orders
Data entry edit checks
Credit sales to customers with poor credit
Credit approval by manager, not by sales function; accurate records of customer account balances
Legitimacy of orders
signatures on paper docs, digital signatures and digital certificates for e-business
stockouts, carrying costs, and markdowns
inventory control systems; sales forecasts; periodic physical inventory counts
shipping errors, wrong merchandise, wrong quantities, wrong address
reconciliation of sales order with picking ticket and packing slip; barcode scanners; data entry applications controls
theft of inventory
restrict physical access to inventory; documentation of all internal transfers of inventory; periodic physical counts of inventory and reconciliation of counts with recorded amounts; RFID and barcode technology
Failure to bill customers
separation of shipping and billing functions; prenumbering of all shipping documents and periodic reconciliation with invoices; reconciliation of picking ticket and bills of lading with sales orders
billing errors
data entry controls; price lists
posting errors in updating accounts receivable
batch totals; reconciliation of subsidiary accounts receivable ledger with general ledger; monthly statements to customers
theft of cash
segregation of duties; minimization of cash handling; lockbox arrangements; prompt endorsement and deposit of all receipts; periodic reconciliation of bank statement with records by someone not involved in cash receipts processing
loss, alteration or unauthorized disclosure of data
backup and disaster recovery procedures; access controls (physical and logical); proper systems configuration; encryption; data transmission controls
poor performance
preparation and review of performance reports