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Auditing

10 Marks Revenue and receipts and general controls Your accounting firm has been appointed to conduct a special investigation into the revenue and receipts cycle of Prop It (Pty) Ltd ("Prop It"), a manufacturer and seller of bricks. Following the interviews with key personnel, the following system description was obtained: Prop It only sells to account holders on credit. The company's customer base is divided alphabetically into four groups of approximately equal size. There are four salesclerks, each of whom is responsible for one group of customers. Each salesclerk is responsible for approving orders, and processing adjustments to accounts, such as processing credit notes when required. The company only accepts orders via e-mail or online orders. After placing the online order, some customers provide the originat copy of their order by e e-mail. All orders are received by the administration clerk, Mrs Tootie Fruity. There is one e-mail address for the orders which only Mrs Tootie Fruity has access to. Every morning, she opens the mailbox, and immediately sorts both e-mail and online orders into the four alphabetic groups. She then distributes the four piles to the salesclerks responsible for the respective groups or places them on the salesclerks' desks. Required: Describe four (4) weaknesses in the revenue and receipts cycle of Prop It (Pty) Ltd, and describe one possible impact on the accuracy of the accounting records for each of the weaknesses described. Present your answer as follows: Presentation marks: 2 marks

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