Total Accounts Receivable
ACL Case Study
This paper contains the summary of the details and results of the audit tests on
Bradmark’s Revenue and Expenditure Cycles. The audit tests were performed through the ACL Program.
Rachelle Cultura | Trixia Ebol | Christine Fonseca
Mary Rose Samas | Nadaine Tongco
Ross & Specter Co.
October 24, 2012
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Assessment of Internal Controls over the Revenue Cycle
The assessment of Bradmark’s internal controls over its revenue cycle procedures were done through the analysis of the processes each department is undertaking.
For the Sales Department, it is but right that the clerk will seek the approval of the credit manager for customers with insufficient …show more content…
These tables were joined and afterwards, the amounts due found in the Sales
Invoice table was contrasted with those actually received in the Cash Receipts table. The figure below shows the records that did not match and, in effect, constituted errors to the reported balances of the accounts receivable and cash receipts. There are a total of eight records that show inconsistencies within the records of the company. Nos. 12684, 12687 and 12814 were remittances that were recorded by the Cash Receipts clerk but were not found in the Sales Invoice records. These may be considered as a red flag to Bradmark. With these results, the management should verify if they have, in fact, received these payments as this may indicate theft within the
Other records like remittance nos. 12657, 12663 and 12709 demonstrate probable human errors while recording, since these discrepancies were due to lack or excess of digits as shown below.
Lastly, remittance nos. 12651 and 12697 reveal that the amounts due have not been paid in full. This constitutes receivables from the customers. There is a need, however, to verify this and include those with partial payments in the list of customers to whom confirmation letters will be sent.
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Other Operational Concerns
(Related to Revenue Procedures)
Moreover, to make sure that the credit policy is consistently applied and that no customer exceeded his/her assigned credit limit, the join function was utilized.