- July 31, 2021 at 9:54 am #629912
Goods received notes (GRNs) are sent to the accounts department every two weeks.
This could result in delays in suppliers being paid as the purchase invoices could not be agreed to a GRN and also recorded liabilities being understated.
Additionally, any prompt payment discounts offered by suppliers may be missed due to delayed payments.
Maam don’t you think the above is a business risk?July 31, 2021 at 10:35 am #629917
GRNs are only sent to the accounts department.
Failing to send a copy to the ordering department could result in a significant level of unfulfilled orders leading to a loss of sales and stock?outs.
again maam in the same question isnt this business risk?July 31, 2021 at 10:36 am #629918
maam how can kit be wrong at two places in the same answer? Is there some catch?July 31, 2021 at 10:46 am #629919Kim SmithKeymaster
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Only the “additionally …” in the first point addresses business risk. The main point is that delay in matching purchase invoices to GRNs may result in cut-off error/incomplete recording of liabilities at the reporting date.
I concur with you that the 2nd point is also business risk.
In the real world the auditor would draw the client’s attention to such matters – i.e. “adding value” to the statutory audit. But this goes beyond ISAs and beyond the AA syllabus.
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