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Hello
In mar-june 2017 past paper there was deficiency that New customers undergo a credit check, after which a credit limit is proposed by the sales staff and approved by the sales director, these credit limits are not reviewed after this.
For its contol the answer in past paper was that Credit limits should continue to be approved by the sales director; however, on a regular basis the sales director should review these limits based on order history and payment record.
If instead of the above control, I slightly change it and write that Credit limit should be regularly reviewed by sales director and updated based on level of sales transactions and credit risk. So would it be fine?
And for its test of control auditor will need to ask for a sample of credit limits form to see whether they have reviewed by sales director or not? Right?
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