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Tinkerbell: Key Control Test of Control

The document describes key controls and tests of controls for Tinkerbell's order fulfillment process. It outlines controls for credit checks on new customers, updating price lists, setting authorized discounts, segregating warehouse duties, and matching dispatch documents to invoices. Tests of control include sample checks of credit authorizations, price list amendments, applied discounts, signatures on dispatch documents, and sales invoice sequencing. The controls are intended to reduce risks around irrecoverable debts, improper pricing, unauthorized discounts, timely order fulfillment, and mismatches between fulfillment records.

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Ian
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60 views2 pages

Tinkerbell: Key Control Test of Control

The document describes key controls and tests of controls for Tinkerbell's order fulfillment process. It outlines controls for credit checks on new customers, updating price lists, setting authorized discounts, segregating warehouse duties, and matching dispatch documents to invoices. Tests of control include sample checks of credit authorizations, price list amendments, applied discounts, signatures on dispatch documents, and sales invoice sequencing. The controls are intended to reduce risks around irrecoverable debts, improper pricing, unauthorized discounts, timely order fulfillment, and mismatches between fulfillment records.

Uploaded by

Ian
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
Download as docx, pdf, or txt
Download as docx, pdf, or txt
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Tinkerbell

Key Control and Test of Control

Key Control Test of Control


The orders are entered by an order clerk and the system Select a sample of credit sales and review the credit
automatically checks that the goods are available and that authorization, confirming whether actually they have the
the order will not take the customer over their credit limit. funds to pay for the sale according to terms.

This reduces the risk of irrecoverable debts as the point of Ensure this is done by a responsible official.
sales are recognized to customers who are accepted are
actually creditworthy.

And also it reduces the risk of customer dissatisfaction as


customers will not pay for orders that is actually out of
stock.
For new customers, a sales manager completes a credit To ensure it is done by a credit controller, inspect a sample
application; this is checked through a credit agency and a if there is a credit controller’s signature.
credit limit entered into the system by the credit
controller. And enquire on who can actually set credit limits.

This reduces the risk of irrecoverable debts as the point of


sales are recognized to customers who are accepted are
actually creditworthy and is able to pay the invoice.
The company has a price list, which is updated twice a Scan a sample of items / receipts and trace its price to the
year. price list to see if they match on that date (as prices can
change over time).
This ensures price list reflects the value of the product and
also the current situation of the market, leading customers Enquire management on who actually has the authority to
not to be over or undercharged. amend the price list.
Larger customers are entitled to a discount; this is agreed Have a cashier attempt a price override that is non-
by the sales director and set up within the customer manager approved to see if it is does not work.
master file.
Enquire management on who actually has the authority to
This reduces the risk of unauthorized discounts, declare discounts and amend the master data file.
amendments, and sales value being undervalued.
Recalculate the discounted sales, trace back the applied
discount to the agreed discount.
The warehouse team pack the goods from the dispatch list Visit a warehouse and observe whether there are more
and, before they are sent out, a second member of the than one person managing the pick list and goods
team double checks the dispatch list to the GDN, which dispatching.
accompanies the goods.
Inspect the GDN for evidence of the signature to confirm
This is a sign of segregation of duties, ensuring that in the the physical goods have been checked to the GDN and the
checking process, the correct goods are dispatched on a GDN has been checked against the order prior to dispatch.
timely basis.
Once dispatched, a copy of the GDN is sent to the accounts Review a sample from the pick list to see if it was actually
team at head office and a sequentially numbered sales ticked off for evidence.
invoice is raised and checked to the GDN. Periodically a
computer sequence check is performed for any missing To assess if the GDNs are sequentially numbered, re-
sales invoice numbers. perform a sequence check of sales orders. Discuss any gaps
with the staff.
This ensures that the GDN and invoices does not get
mismatched, reducing the risk of delays in the dispatch
system, leading to orders being dispatched on a timely
basis.

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