I. Potential errors in the processing of sales transactions:-
• Good's dispatched to customers without being invoiced. Services rendered without being
invoiced.
• Good's being sent to bad credit risk customers. In other words. customers who have a
history of not honoring their credit obligations.
• invoicing errors whereby sales are invoiced but not recorded in the books_
• Receipt of cash or cheques not being recorded in the books.
• Unauthorized crediting of debtors account.
2. Preventive measures:
• Sales orders should be pre-numbered so as to initiate audit trail, and minimise dispute
with customers.
• Sales orders should be approved by the credit department which will also assess the
credit worthiness of the customer.
• Matching of all delivery and dispatch notes by an independent clerk.
• Checking invoices for arithmetic accuracy, pricing discounts allowed and so forth.
• Use pre-numbered sales invoices and issue invoices in sequence.
• Establish credit control department to examine orders, review long outstanding debts
and investigate and follow up late payments:
3. Examples of discrepancies in the: accounting records, that could indicate the possibility
of fraud.-
• Transactions that, are not recorded in a, compete or timely manner or are improperlyrecorded
as to 'amount accounting period, classification or entity, policy.
• Unsupported or un-authorised balances or transactions.
• Last-minute adjustments that significantly affect financial results
• Evidence of employees' access to systems and records inconsistent with that necessary to
perform their authorised duties.
• Tips or complaints to the auditor about alleged fraud.
Kavungya answered the question on May 14, 2019 at 13:13
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Date posted:
May 14, 2019
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May 14, 2019
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May 14, 2019
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May 14, 2019
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May 14, 2019
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May 14, 2019
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May 14, 2019
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May 14, 2019
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May 14, 2019
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May 14, 2019
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Date posted:
May 14, 2019
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Answers (1)