Internal control over the revenue cycle White Floyd, Inc, a retail store, is concerned about the lack of control procedures over the recording of sales transactions. The company is concerned that the transactions might not be recorded accurately and valued properly in accordance with GAAP. Recommend control procedures to help ensure that transactions are recorded accurately and valued properly
Control procedures that should be implemented to ensure that sales transactions are properly recorded are:
? Sales orders are filled by authorized personnel following an authorized price catalog.
? Sales prices are to be maintained on the computer and access to the computer file is restricted to those authorized to change it.
? Internal audit department periodically should perform tests of sales invoices to see if the terms agree with authorized price lists.
? Executive approval should be required of all large, unusual, or complex sales transactions.
? Oral or written verification of prices with customers should be required for all nonstandard sales.
? Products shipped and billed must be checked against an existing product list.
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