What internal control procedure(s) would provide protection against threats? .2,

Question

What internal control procedure(s) would provide protection against threats? .2, a. Workers on the shipping dock steal goods, claiming that the invento b. An employee posts the sales amount to the wrong customer account becau c. An employee makes a credit sale to a customer who is already four months behind d. An employee authorizes a credit memo for a sales return when the goods were ne e. An employee writes off a customer's accounts receivable balance as uncollectih f. Customers are billed for the quantity ordered, but the quantity shipped is actul reflect errors in the inventory record incorrectly keys the customer account number into the system making payments on his account. actually returned conceal the theft of subsequent cash payments from that customer. less because some items have been back ordered. e mailroom clerk steals checks and then endorses them personal bank account. h. The cashier steals funds by cashing several checks from castomers. i. A waiter steals cash by destroying the customer sales ticke for customers who paid cash. j. Goods are shipped to a customer, but that customer is noi billed. k. A business loses sales because of stockouts of several products for which the com- I. A business experiences unauthorized disclosure of the buying habits of several well- m. A business loses all information about amounts owed by customers in N n. The company's Web site is unavailable for seven hours because of a power O puter records indicated there was adequate quantity on hand known customers. City because the master database for that office was destroyed in a fire. ork ustomers credit card numbers are intercepted and sto company's Web site wle b sn to the D. A sales clerk sells a $7,000 wide-screen TV to a friend and alters the price to q. A shipping clerk who is quitting to start a competing business copies t ,$700 the names the company's 500 largest customers and offers them lower prices and bet they purchase the same product from the clerk's new company r. A fire in the office next door damages the company's servers and all opts its di in the server room. The company immediately 1 saster recovery procedures and shifts to a backup center several milesthba company has made full daily backups of all files and has stored a cop center. However, way none of the backup copies are readable

Explanation / Answer

(a) Inventory clerk should take proper care by count and document goods as they leave inventory storage. Shipping personnel should compulsorily count and record the receipt of goods from storeroom to accept the responsibility for the custody of goods transferred.

(b) If the transactions are being entered online, control system could be used. This system could respond to the operator of the system entering the account number by finding and displaying the customer's name for the operator to review and check.

(c) Updated credit records must be maintained to control this problem. The credit manager should review the past dues of the customer to avoid additional sales to those customers during the credit approval process.

A credit limit check would not be sufficient. A computer system should be programmed in order to check past dues accounts and credit limit to authorize sales.

(d) A receiving statement should be required before a credit memo sales return is issued. A system should be programmed to block issuance of memos without the required the required documentation and physical verification that the goods are received.

(e) The main problem usually occurs because a single person writes off the accounts receivable account and processes the cash payments. Therefore, to prevent this problem the best way is to appoint a separate person for writing off accounts receivable account and for processing cash payments.

Note: For f to r ask as a separate question

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