Acct571 Week4 Problem12.6

ACCT571

Problem 12.6

Sales Order Entry

Yes | No | Are there data entry controls in place? |

If No then: | Orders may be made that are incomplete and/or inaccurate which creates inefficiencies and can negatively affect customer perception, adversely affecting future sales. |

Yes | No | Is access restricted to the master data? |

If No then: | Unauthorized changes could destroy the integrity of the data. |

Yes | No | Are data entry edit controls incorporated on the Web site? |

If No then: | Customers could enter inaccurate and/or incomplete information. |

Yes | No | Are signatures required for transactions? Ink for paper and digital for electronic. |

If No then: | Customer could deny having placed the order, costing the company money on transit and possibly on production if product is custom made. |

Yes | No | Is sales activity monitored by reports that focus on key performance drivers? |

If No then: | Sales order entry may not be as effective or efficient as possible. Profit margin may not be maximized. |

Yes | No | Is property authorization required for each credit sale? |

If No then: | Sales may be made that are uncollectible. |

Yes | No | Are customer credit limits set and modified by a credit manager with no sales responsibility? |

If No then: | An uncollectible sale may be made on credit because the person setting the credit limit is motivated to make a sale and increase their commission (or meet sales quota). |

Yes | No | Does credit approval happen before goods are shipped? |

If No then: | Goods may be shipped that will not be paid for. |

Yes | No | Are accounts receivable aging reports reviewed regularly? |

If No then: | Management may be unaware of changes that are needed to credit policies. Timing for future cash inflows related to sales and bad debt estimates may be off. |

Yes | No | Is a perpetual inventory control system used? |

If No then: | Stockouts may result in lost sales and excess inventory increases...