Auditing 288 A2 Notes
3. The delivery note should contain the following information:
Revenue and Receipts Cycle: • Order number
• Quantity
Receiving orders from customers: • Product code
• Customer
1. A pre-numbered, pre-printed order form is completed by one of the sales clerks in • Delivery date
the sales department when the order is received from the customer. • Delivery address
Storeman signed the delivery note as proof that inventory packed correctly and to
2. The order must include the necessary details such as the customers name, quantity assign responsibility.
of goods, inventory code, VAT, discount available and approved price
4. The chief storeman makes a comparison between the physical goods, the delivery
3. The order form must be approved by the client by confirming the order with their note and the sales order. He looks at the quality, quantity, and that the description is
signature and emailing /faxing the order back. corrected. He then signs the delivery note to assign responsibility.
4. Before the sales order is approved and distributed, the sales manager must first 5. The gatekeeper ensures all physical goods leaving the premise have a corresponding
check: delivery note. This is marked on the gate register or delivery note .
• That the appropriate inventory available
6. The delivery note is in quadruple (5):
• Check the accuracy of the order by reperforming the calculations
• 2x copies of delivery notes accompany the goods to the client.
• Check prices agree with approved price list
o One copy is signed by client and returned to delivery staff whom
• Check credit limits and whether there is outstanding debt
will return with it to the warehouse. After which the signed copy
• Sign order as evidence that client may purchase on credit
will be forwarded to the accounting department for the invoice to
be prepared.
5. The approved sales order must be sent in quadruplicate: CIAS
o One copy is kept by the client
• Client – for their records that proof that the order was placed
• Sales department – proof that the order has been executed
• Inventory store – to select goods for delivery
• Warehouse – one copy remains warehouse as evidence that inventories
• Accounting department – to have source documents with which to
have been dispatched and number sequences can be checked
compare during invoicing
• Inventory clerk – so inventory clerk can update records as well as to keep
• Sales department – for number sequence check and to follow up on
as evidence order executed
outstanding orders
7. The chief storeman /independent person must:
6. On a regular basis an independent person should:
• Perform number sequence checks regularly on the delivery notes
• Review of number sequence check of orders
• Outstanding delivery notes must be followed up on
• Investigate any missing numbers
• Agree delivery notes to approved orders Invoicing and Recording:
• Follow-up on long outstanding orders Sales Invoice
Picking and dispatching of goods BEFORE the goods are loaded onto trucks for delivery: 1. An invoicing clerk creates a pre-numbered invoice on account of the signed delivery
Delivery note creation note returned from the customer that confirmed the sales order.
1. The approved sales order is sent to demarcated area is warehouse. The storeman 2. The invoice must include the following information:
then sends email to sales department to confirm receipt of the order. The chief • Order number
storeman then instructs packers to pack accordingly.
• Date
• Delivery note number
2. A pre-numbered, pre-printed delivery note is prepared by responsible storeman and
• Quantity
then attached to the packed goods.
• Product code
, • Price according to approved sales order *Deposit Receipts (Deposit silps)
• Signature of the preparer 1. This is a bank document filled by the business to record a deposit of payment
received by a customer
3. The other invoicing clerk checks: 2. Details include:
• The calculations on the invoice • Date of deposit
• Compares prices, quantities and descriptions with the approved sales • Details on cheque
order form • Amount of cash and cheque
• Signs as evidence of doing so and to accept responsibility. • Total amount received
3. Copies are issued in two-fold:
4. The invoice is sent in triplicate: • Bank – received copy for depositing of money received
• Client – for them to know the outstanding amounts / amounts payable • Accounting department – copy remains in own records so business can
• Sales department – evidence of the transaction and for a number record money deposited
sequence check 4. Accuracy checks should be performed by management and signed. The depositing of
• Accounting department – to enable them to record sales in sales journal cash should be done daily (SOD)
and debtors ledger 5. Monitoring should be conducted by the accountant through the use of monthly
reconciliations
Sending out monthly statements: • Bank reconciliations
• Debtors reconciliations
1. On a monthly basis accountant / independent person prepares pre-numbered
statements for credit clients. The monthly balance contains: *Credit Note:
• A starting balance
• A summary of all invoices purchased during the month 1. When goods are returned by client, the clerk checks the goods with a proof of
• Interest on outstanding balance (if applicable) purchase (invoice) and checks the quality.
• Payments and returns 2. A prenumbered credit note is then issued
• Closing balance 3. Details included are:
• Details on the person returning the goods
2. Two copies of this statement is prepared: • Description of the goods and the amount. This acknowledges the
• Accounting department – remains in this department for future reduction in the customer’s account for non-payment reason
reference 4. The copies are sent in four-fold:
• Customer – for them to see their amounts payable as well as to check if it • Customer – evidence goods were returned
is correct • Accounting department – so debtors account can be reduced
• Warehouse and inventory records – so stock levels can be updated
*Receipt: • Own records – the goods receiving department
5. Credit manager must check and authorise the credit note as well as sign.
1. Mail register must be opened for payment by cash, cheque and credit card 6. The returned goods are then sent to the inventory department / warehouse where
2. The prenumbered cash receipt is issued in two fold: the goods are checked by storeman with the credit note. The number sequence is
• Customer – as proof of payment checked and missing inventory is followed up on.
• Accounting department – kept in own records for recording money 7. Inventory records are then updated and included in the goods returned.
received
3. The details include: Control objectives for Bad Debt written-off:
• Details of payee To ensure that:
• Date 1. All bad debts written-off are authorised
• Amount 2. Only debts that are no longer recoverable are written off
4. The cash receipts kept in safe and accuracy checked and authorised by manager and 3. All debts that are not recoverable are written off
signed. 4. Bad debts are classified correctly in accounting records
5. Bad debt calculations are accurate
3. The delivery note should contain the following information:
Revenue and Receipts Cycle: • Order number
• Quantity
Receiving orders from customers: • Product code
• Customer
1. A pre-numbered, pre-printed order form is completed by one of the sales clerks in • Delivery date
the sales department when the order is received from the customer. • Delivery address
Storeman signed the delivery note as proof that inventory packed correctly and to
2. The order must include the necessary details such as the customers name, quantity assign responsibility.
of goods, inventory code, VAT, discount available and approved price
4. The chief storeman makes a comparison between the physical goods, the delivery
3. The order form must be approved by the client by confirming the order with their note and the sales order. He looks at the quality, quantity, and that the description is
signature and emailing /faxing the order back. corrected. He then signs the delivery note to assign responsibility.
4. Before the sales order is approved and distributed, the sales manager must first 5. The gatekeeper ensures all physical goods leaving the premise have a corresponding
check: delivery note. This is marked on the gate register or delivery note .
• That the appropriate inventory available
6. The delivery note is in quadruple (5):
• Check the accuracy of the order by reperforming the calculations
• 2x copies of delivery notes accompany the goods to the client.
• Check prices agree with approved price list
o One copy is signed by client and returned to delivery staff whom
• Check credit limits and whether there is outstanding debt
will return with it to the warehouse. After which the signed copy
• Sign order as evidence that client may purchase on credit
will be forwarded to the accounting department for the invoice to
be prepared.
5. The approved sales order must be sent in quadruplicate: CIAS
o One copy is kept by the client
• Client – for their records that proof that the order was placed
• Sales department – proof that the order has been executed
• Inventory store – to select goods for delivery
• Warehouse – one copy remains warehouse as evidence that inventories
• Accounting department – to have source documents with which to
have been dispatched and number sequences can be checked
compare during invoicing
• Inventory clerk – so inventory clerk can update records as well as to keep
• Sales department – for number sequence check and to follow up on
as evidence order executed
outstanding orders
7. The chief storeman /independent person must:
6. On a regular basis an independent person should:
• Perform number sequence checks regularly on the delivery notes
• Review of number sequence check of orders
• Outstanding delivery notes must be followed up on
• Investigate any missing numbers
• Agree delivery notes to approved orders Invoicing and Recording:
• Follow-up on long outstanding orders Sales Invoice
Picking and dispatching of goods BEFORE the goods are loaded onto trucks for delivery: 1. An invoicing clerk creates a pre-numbered invoice on account of the signed delivery
Delivery note creation note returned from the customer that confirmed the sales order.
1. The approved sales order is sent to demarcated area is warehouse. The storeman 2. The invoice must include the following information:
then sends email to sales department to confirm receipt of the order. The chief • Order number
storeman then instructs packers to pack accordingly.
• Date
• Delivery note number
2. A pre-numbered, pre-printed delivery note is prepared by responsible storeman and
• Quantity
then attached to the packed goods.
• Product code
, • Price according to approved sales order *Deposit Receipts (Deposit silps)
• Signature of the preparer 1. This is a bank document filled by the business to record a deposit of payment
received by a customer
3. The other invoicing clerk checks: 2. Details include:
• The calculations on the invoice • Date of deposit
• Compares prices, quantities and descriptions with the approved sales • Details on cheque
order form • Amount of cash and cheque
• Signs as evidence of doing so and to accept responsibility. • Total amount received
3. Copies are issued in two-fold:
4. The invoice is sent in triplicate: • Bank – received copy for depositing of money received
• Client – for them to know the outstanding amounts / amounts payable • Accounting department – copy remains in own records so business can
• Sales department – evidence of the transaction and for a number record money deposited
sequence check 4. Accuracy checks should be performed by management and signed. The depositing of
• Accounting department – to enable them to record sales in sales journal cash should be done daily (SOD)
and debtors ledger 5. Monitoring should be conducted by the accountant through the use of monthly
reconciliations
Sending out monthly statements: • Bank reconciliations
• Debtors reconciliations
1. On a monthly basis accountant / independent person prepares pre-numbered
statements for credit clients. The monthly balance contains: *Credit Note:
• A starting balance
• A summary of all invoices purchased during the month 1. When goods are returned by client, the clerk checks the goods with a proof of
• Interest on outstanding balance (if applicable) purchase (invoice) and checks the quality.
• Payments and returns 2. A prenumbered credit note is then issued
• Closing balance 3. Details included are:
• Details on the person returning the goods
2. Two copies of this statement is prepared: • Description of the goods and the amount. This acknowledges the
• Accounting department – remains in this department for future reduction in the customer’s account for non-payment reason
reference 4. The copies are sent in four-fold:
• Customer – for them to see their amounts payable as well as to check if it • Customer – evidence goods were returned
is correct • Accounting department – so debtors account can be reduced
• Warehouse and inventory records – so stock levels can be updated
*Receipt: • Own records – the goods receiving department
5. Credit manager must check and authorise the credit note as well as sign.
1. Mail register must be opened for payment by cash, cheque and credit card 6. The returned goods are then sent to the inventory department / warehouse where
2. The prenumbered cash receipt is issued in two fold: the goods are checked by storeman with the credit note. The number sequence is
• Customer – as proof of payment checked and missing inventory is followed up on.
• Accounting department – kept in own records for recording money 7. Inventory records are then updated and included in the goods returned.
received
3. The details include: Control objectives for Bad Debt written-off:
• Details of payee To ensure that:
• Date 1. All bad debts written-off are authorised
• Amount 2. Only debts that are no longer recoverable are written off
4. The cash receipts kept in safe and accuracy checked and authorised by manager and 3. All debts that are not recoverable are written off
signed. 4. Bad debts are classified correctly in accounting records
5. Bad debt calculations are accurate
