Question

what it controls should prevent/detect the following threats? explain

1. The data entry clerk mis-keys the customer number for a customer order, so the goods are sent to the wrong address and charged to the wrong customer.

2.An accounts payable clerk changes the bank details for a vendor to her own, enters a duplicate vendor invoice, and pays the amount to herself.

3.The sales system generates shipping documents as authority for shipment to customers, but some shipments are not invoiced to customers.

4.The computer program processing sales incorrectly calculates GST.

5.The data entry clerk entering vendor invoices for acquisitions keys a non-existing expense account number, and so no expense was debited for this invoice.

Answer 1

Answer.

1) If a data entry clerck makes a mistake it can be resolved if it is within few days after the mistake. Some times Clerical mistakes may happen in every organization and can be rectified. Here prodcut sent to wrong address and charged to the wrong customer. Once the mistake found, then firstly we have to contact the customer to inform any reasonable things to say about the delay caused. Some customer may not accept the wrong delivery. So it is very important to convince the original customer. The problem can be rectified by different ways. If the product is not used by the worng customer then it can be collect from their and deliver to the original customer by chaning invoice. If it is used by the wrong customer and that person is willing to pay the amount. Then the company can deliver another product to the original customer. And if any additional cost incurred to the management due to the mistake from the clerk, then the management can charge this additional cost from the clerck itself who made the mistake.

2) If clerck makes the mistake in bank accounts and made wrong payment. It can be rectified by instructing the concerned bank in written that to reverse the payment and transfer the amount to the correct account. If any charge can be levied from the clerck who made the mistake.

The sales system generates shipping documents as authority for shipment to customers, but some shipments are not invoiced to customers

3) If the shipping documents is the authority to shipment for customers, then it is not coming as the invoice to the customer. A separate tax invoice to needed by the customer to make the payment. If the customer is another business firm. The GST invoice must be shown in the GST return for ITC. A shipping document cannot be considered as invoice for return filing.

4) If the computer programm mistakenly produced wrong GST invoice. It is very easy to re-issue the invoice by editing the same invoice in the computer programm, if it is found before filing the GST of that particular invoice. If GST is filed it can be re-issue by correcting the invoice in the programm but we need to amend the invoice in GST portal also. If a wrong invoice of September 2020, found after the GST filing, in monthly return process, the amendment can be done at the time of next month's return filing i.e., November 2020.

Once an invoice is raised, proper re-checking the customer data, quantity, amount, date etc. is required prevent mistakes in billing. If a large company producing huge number of invoices in a day is required additional number of staffs to re-check the invoices before the delivery. Management can controlls every department effectively by proper interanl verification. Organizations are appoiinted internal-auditors to findout if any mistakes happened and to correct the system for the effective management. Even a single mistake is enough to make the company becoming a loss.

Thank you. If you have any doubts, you can please comment.