Bath & Secret Scent Sdn. Bhd. (BSSSB) is a local company that produce and sells toiletries. They have been in operation for more than 15 years, and their fiscal year ends on December 31. The company has two types of customers, retail customers and contract customers. BSSSB sells its product through two methods: online ordering on the company website and manual ordering through a salesperson. Manual orders account for 60% of the company's revenue, which comes from contracts to sell toiletries to hotels and resorts all around Malaysia. The sales and collection system is described below: Manual ordering system Alya, a sales staff at BSSSB, is in charge of manual order; she accepts customer orders and raise sales invoice after credit approval done by accountant, Najwa. The sales system automatically adds prices when creating invoices. Each contract customer has contracted prices that are lower than the online prices. Hence, Alya manually edit the invoices before sending them out. Online ordering system Trade customers place online orders up to their credit limit, receive an email confirmation, and the sales order interfaces into the shipping system. The customer account number is linked to the order number. New trade customers are added to the sales ledger master file after passing appropriate credit checks done by Najwa. On the day an online order is placed, the system automatically generates sales invoices for trade customers. The prices are set in accordance with the rates shown on the website. When BSSSB makes special offers, the master file data will be updated to ensure the relevant prices are applied to all invoices. A senior sales clerk is normally in charge of this task Shipping of Goods Goods are shipped on daily basis with a bill of lading that refers to the sales order number. The bill of lading used is not numbered consecutively. To ensure that all goods were delivered safely, the company is using a reputable national courier company. As at to date, no complaint made by customers on late delivery of goods purchased. Revenue and receivables records I Anne, the account clerk, is in charge of recording account receivables and cash receipts. On a monthly basis, Hazriq, an account executive will prepare bank reconciliation. He also send monthly statements to all customers to remind on their outstanding balance. At the end of December, Najwa reconciles the sales ledger control account to confirm the year-end balance. She is also in charge of preparing an account receivable aging report to keep track of past-due accounts. Required (a) List and explain FIVE (5) weaknesses in Bath & Secret Scent Sdn. Bhd.'s sales and collection system that could lead to misstatement in the financial statements. (10 marks) (b) Give recommendations on how to improve each of the weakness identified in (a). (10 marks) [Total: 20 Marks] Bath & Secret Scent Sdn. Bhd. (BSSSB) is a local company that produce and sells toiletries. They have been in operation for more than 15 years, and their fiscal year ends on December 31. The company has two types of customers, retail customers and contract customers. BSSSB sells its product through two methods: online ordering on the company website and manual ordering through a salesperson. Manual orders account for 60% of the company's revenue, which comes from contracts to sell toiletries to hotels and resorts all around Malaysia. The sales and collection system is described below: Manual ordering system Alya, a sales staff at BSSSB, is in charge of manual order; she accepts customer orders and raise sales invoice after credit approval done by accountant, Najwa. The sales system automatically adds prices when creating invoices. Each contract customer has contracted prices that are lower than the online prices. Hence, Alya manually edit the invoices before sending them out. Online ordering system Trade customers place online orders up to their credit limit, receive an email confirmation, and the sales order interfaces into the shipping system. The customer account number is linked to the order number. New trade customers are added to the sales ledger master file after passing appropriate credit checks done by Najwa. On the day an online order is placed, the system automatically generates sales invoices for trade customers. The prices are set in accordance with the rates shown on the website. When BSSSB makes special offers, the master file data will be updated to ensure the relevant prices are applied to all invoices. A senior sales clerk is normally in charge of this task Shipping of Goods Goods are shipped on daily basis with a bill of lading that refers to the sales order number. The bill of lading used is not numbered consecutively. To ensure that all goods were delivered safely, the company is using a reputable national courier company. As at to date, no complaint made by customers on late delivery of goods purchased. Revenue and receivables records I Anne, the account clerk, is in charge of recording account receivables and cash receipts. On a monthly basis, Hazriq, an account executive will prepare bank reconciliation. He also send monthly statements to all customers to remind on their outstanding balance. At the end of December, Najwa reconciles the sales ledger control account to confirm the year-end balance. She is also in charge of preparing an account receivable aging report to keep track of past-due accounts. Required (a) List and explain FIVE (5) weaknesses in Bath & Secret Scent Sdn. Bhd.'s sales and collection system that could lead to misstatement in the financial statements. (10 marks) (b) Give recommendations on how to improve each of the weakness identified in (a). (10 marks) [Total: 20 Marks]