In: Accounting
Examine the narrative provided below. Discuss how this process implements the concept of segregation of duties. Be specific as to which entity (or entities) performs each of the four-event processing functions.
The Customer Service Representative (CSR) enters a sales order.
The system then prompts the CSR to enter the customer number. The
system then automatically retrieves certain standing data, such as
the customer name, address, and credit terms, from the customer
master data.
The customer master data, including credit limits, is initially
approved and recorded by the credit department upon initial
application by the customer. Changes to the customer master data,
including credit limits, must be approved and recorded by the
credit department whenever appropriate. The CSR asks the customer
to confirm the name and address to ensure that the correct customer
record has been retrieved.
Next, the CSR enters the other data in the sales order, When the
CSR enters data for each item ordered, starting with the part
number, the system automatically displays the description and
price. Finally, the CSR enters the quantity ordered. If the total
amount of the current order, any open orders, and the outstanding
receivable balance, exceeds the customer's credit limit, the
operator is warned of this fact, the order is suspended, and the
credit rejection procedures are initiated. If
the total amount falls within the customer's credit range, the
processing continues.
Personnel (specifically the controller) in the credit department
assign credit limits and any exceptions to credit limits. Credit
rejections procedures require a review of the customer’s credit
limit by the controller in consultation with the sales manager, and
where the credit limit is confirmed, the customer should be
informed by the CSR and the order cancelled. Should the balance
shown on the inventory data be less than the quantity ordered,
sales back order procedures are initiated.
After the CSR has finished entering the order data, the computer
creates a sales order record, updates the inventory master data to
allocate the inventory to the sales order, and gives the CSR a
sales order number that the CSR relays to the customer.
Simultaneously, a picking ticket, containing a bar code of the
sales order number, is printed in the warehouse.
As each item is picked, warehouse personnel insert the picked
quantities on the picking ticket. When all the goods have been
picked, warehouse personnel compare the goods to the picking
ticket, sign the ticket to accept transfer of the goods, and then
move the goods and the completed picking ticket to the shipping
department. .
Billing is advised and a Sales Invoice is generated and sent to the
customer, and the customer’s Accounts Receivable balance is updated
automatically.
Shipping personnel scan the bar code on the picking ticket to bring
the sales order up on their computer screen. After they confirm
that this is the correct order and that the quantities are correct,
they select the option to record the shipment. This action causes
the computer to update the sales order, inventory, and general
ledger master data to reflect the shipment and to print a packing
slip and bill of lading. The goods are packed, with the packing
slip inside, the shipping label (bill of lading) is attached to the
box, and the box is given to the carrier for delivery. The
completed picking ticket is discarded.
From time to time, personnel other than the warehouse personnel
(e.g. controller) conduct a physical count of the inventory held in
the warehouse and compare this with the recorded amounts. Any
discrepancies are investigated and recorded values updated in the
system to reflect the actual quantities held.
sol:
Segregation of duties refers to sharing responsibilities of a key method that disperses the crucial functions of that method to quite one person or department.
Customer Service Representative refers to the one that acts on the behalf of the client and for the client so as to resolve all the queries of the purchasers and providing them for the services asked. This refers to the one that represents the facet of the client.
The duties segregation is done as:
1. Events authorization
2. Events execution
3. Events recording
4. Resources safeguarding
The entities that perform four process events:
1. The representative of client service: this can record the events by recording the sales transactions.
2. Department of credit: this can authorize the dealings or the event. If there ar any changes or amendments then they're recognized and approved by the department of credit.
3. Warehouse: this can be the place wherever the merchandise or deliverables ar hold on which suggests to safeguard the resources.
4. Department of shipping: this can be meant to examine that no matter is ordered should be delivered properly and on time that once more ensures the safeguarding of resources.
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