- This topic has 1 reply, 2 voices, and was last updated 1 month ago by Kim Smith.
- September 6, 2020 at 1:59 pm #583679jdms1708
I understand that the standars for the AA states that the candidate should assume that the audited companies work in a computer based space.
On internal controls , could I reference to automated controls ,i.e:
“Standard credit terms for customers are 30 days and on a monthly basis , invoices which are 90 days outstanding are notified to the sales staff”
I understand that there is too much time to advise to sales staff about overdue balances and that in this particular case they are incentivated due to their personal sales targets. However could I state also the following defficiency and recommendation:
There is not an automatical control to avoid giving credit to clients with invoices outstanding, this increases the risk that sales staff continue selling and future potential unrecovable debts.
Set and implement an automated control that lock a client when have balances outstanding and no more credit is given until overdue balances are cleared.
Would this approach be correct? i see many questions about internal controls that dont actually states anything about automated controls which are better than manuals and i would like if possible to take advantage of that .
ThanksSeptember 6, 2020 at 2:54 pm #583689Kim SmithKeymaster
I do not have the referenced Q & A to hand and in any case I not able to “mark” your suggestion of answer points (since this would open floodgates to requests for similar marking).
I don’t think you need to try to be “clever” – if the control is that the credit controller (say) should investigate unpaid invoices outstanding after x number of days it doesn’t matter how they are notified – their merely being notified isn’t the control.
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