Question

The following is a list of six control plans from this chapter or from Chapter 9. These are followed by a list of six statements describing either a control goal or a system deficiency. Match the five control goals or system deficiencies with a control plan that would best prevent the system failure from occurring. Because there are six control plans, you should have one letter left over.

Control Plans

A. One-for-one checking of the goods, picking ticket, and sales order

B. Independent shipping authorization

C. Turn around document

D. Manually reconcile batch totals

E. Digital signatures

F. Preformatted screens Control Goals or System Deficiencies

Controls or System Deficiencies

1. In reviewing the shipping department controls, the internal auditors at Treacle Company think they found the potential for fraudulent activity. The process appears to allow warehouse employees to ship goods without proper authorization.

2. ANE, Incorporated’s customers send orders over the Internet. ANE is concerned that some of the orders are fraudulent.

3. Allegro, Inc. customers are complaining that they are not receiving the correct items and quantities that they ordered.

4. Damascene, Inc. receives sales orders on its Web server. Several times each day these are downloaded to the order entry and sales system. During the download process several line items are lost.

5. When goods arrive at Villa Nova Company’s warehouse, the shipping clerk keys in the sales order number to retrieve the sales order. Often, the clerk keys the sales order number incorrectly and the wrong sales order is displayed.

Answer 1

S.No	Control Panel	Control or system Deficiencies	Remark
1.	One-for-one checking of the goods, picking ticket, and sales order	Allegro, Inc. customers are complaining that they are not receiving the correct items and quantities that they ordered.	The shippment should be done onone to one basis checking and picking of goods.
2.	Independent shipping authorization	In reviewing the shipping department controls, the internal auditors at Treacle Company think they found the potential for fraudulent activity. The process appears to allow warehouse employees to ship goods without proper authorization.	Shipping department should be Independent in charge .
3.	Turn around document	When goods arrive at Villa Nova Company’s warehouse, the shipping clerk keys in the sales order number to retrieve the sales order. Often, the clerk keys the sales order number incorrectly and the wrong sales order is displayed.	Turnaround document is the document used to capture Input and subsequent event. Shipping clerk should review the documents for error if any.
4	Manually reconcile batch totals
5	Digital signatures	ANE, Incorporated’s customers send orders over the Internet. ANE is concerned that some of the orders are fraudulent.	Digital signature will help in validation and authorisation of order.
6	Preformatted screens Control Goals or System Deficiencies		Company should have control panel for system deficiencies.