Cartefour Company, a retail store dealing in expensive linens and clothing has a statf of about 25 salesclarks. The sales are done in cash or crodit, using the store's own billing rather than credit cards. Most of the larger sales are on credt. Each salesclerk has his/her own males book with prenumbered, three-copy, muiticolored sales slpe attached, but porforated, Only a central cash register is used, nun by the store manager. He's been working for Mr. Tariq Mohammed, the store covnec, for over 10 years. The cash regisier is physically positianed to monitor the entire store. and the front door. All transactions are recorded in the salesclerks' soles books. The original and second copies for each sale are given to the cashiet. The third copy is retained by the stesescierk in the sabes book. When the sale is far cash, the customer poys the salesclerk, who marks all throe copies 'paid" and takes the money to the supervisor. The supervisor compares the clothing to the description on the invoice and the price on the sales tag. He atso rechecks the clerk's calculations. Acy corrections are approved by the salesclerk. The clerk changes hisher sales book at that fime, and the items are packaged and given fo the customer. A credit saje must be approved by the supervisor from an approved credit list atter the salesclerk prepares the three-part itvoice. Next, the supervisor enters the sale in his cash register as a credit or cass sale. The second copy of the invoice, which has been validated by the cosh register, to given to the customer. Tariq must approve of any crodit sales that excoed $1,000. At the end of the day, the salesclerks give their books to the supervisor, and the supervisor compares the totals to the cash register tape, He then creates a summary of the day's transacticns. The cash is deposised in the bank the next moming by Tariq. and he receives a deposit slp, which he gives tothe accounts receivable clerk. If Tariq is unable to deposit the money, the stapervisor goes instead. The cashier's copies of the irvoices are aiso gven to the accounts recelvable cletk along with a summary of the day's receipts. [1] Sarah, the accounts receivable clerk, reviews the sales books and the register tape. She inputs all sales invoice information inte the ferm's. computer, which provides a complete prirtout of all input and summaries. The accounting mummary inctudes sales by the clerk, cash sales, crecit saless, and total sales. Sarah compares this output with the sum and reconciles al differences. The computer updates accounts receivable, irventory. and general ledger master fiet. Aher the update vased, are tota saves. saral corrpares wres oupur with the sum and recericiles nil ditterences. The computer updates accounts recelvable, ifverntory. and general ledger master file. Atter the update procesture has been run on the cornpester, Sarah's assistant files all saies includod in the sales printout. Sarah uses these files to create bils that ater mailed to the Customers. The mal is operad each morning by Tarig't sectedary. She gives all comespondesice to Tariq and all paryments to the supervisor. The supervisor totais the amounts and adds this cash to the repister for tater degosit. He gives the total to Sarah to update custtemer account on the computer, Sarnh uses this lest and all the remittances to recotd cash receipts and update accounta reccivable, again by computer, He reconciles the total receipts on the pre-list to the deposit stip and to her priritout. As the same tirne. he compares the deposit sipp Feceved trom the bark for cash sales to the cash eecoipss ioumal. He has online access to the store s bank, account. which he accessas morithy to pay the store 5 bills online. The computer goneeades a woxidy agod trai balance of accourits receivable. A separate Esting of all tinpaid b=is is asiso autorraticaly propayod. and bothart given to Mr, Tariq. He approves al write-ofts of uncolectble iteres and forwaydes the list to Sarar, who writes thefn ott. Ench month Sarah mails computer-generated statements to customers. Complaints and disagreoments ard resolvod by Ner. Tariq, who thon in orms Samh in writing of any weite-downs of misstatemerits that require correction. The computer system alse automatically totals the ioumals and posts the totals to the general ledger. A general ledger trial balance is printed out, from Which Sarah prepares firancis stasements. Sarah. aise prepaess axonthly bank roconcitations and reconciled the general ledger to the aged acoounts. receivatile trial baianot. Because of the infiportance of irventory control, Sarah prints out the imvertory perpetual totais monthly, on the last dsy of each month. Salescleriss ceunt all invertory after store hours on the last day of each montin for comparison with the perpetuals. An mventory shortage report is providod to Mc. Tariq. The perpetuals are adjusted by Sarah atter Mr. Taria has approved the acjustrments. [2] Part 1: instructions: a. Iblentify aI COSO componerts of irterna: control? b. For the sales transaction-related ausit objective, identity all existing controls? G. For the cash recepts transaction-telated ausit objective. identify all existing coctitola? Expert Q\&A assistant files all saloss includlod in the salos printout, Sisfah uses theted files in cravte bits. That t mailed to the Customers. The fral is copettact dacth ficerting ty Taice's secretary. Ste gives all cortefpondence to Terid and all payenerts to the supervisor. TPo suracterser totais the amounts and adds this cash io the register for later depasit. He of ver that total to Silatil to update cum:bctier atcount on the computer, Somh uros this list nind all the remitilancos to focrord eash tecoipls and updatt necountz roceivelelo, agnin by computor. Ho reconcles tha tatal reiceipts an the pre-tist to the dopese, stip and to her printout, At the smame bime. tad compures the depersit glip fecenvad fram the baris for cash sales to the cash teciefts jourmal Ma has ontine access to the store's bark neosunt, which het atcetsas dnorithiy to paly the sapore s buts contine. The coompuster gonerales ab werity agot triak balarice of atccourts tectivable. A separate istinc of ? uripaid bits is aiso automaticaly prepayed. aris bothare grief to Mr, Taric. Fe approves al list. to Sarat, whic verites there cil. Engh month Surnh mails computeregonorated staterments to Custornert. CGetiglaintis and disagreomonte aro ratsolvid by Nr. Taid, witho than in"orms Sarah in witing of afy wite-cidwans of misstatermerts, that require comector. The computar syrten alse restomationlly totals the jocittals aind posts the tolatis to the gentral lodgor A gecteral lecigoe trial balanee is prirled aut. From Which Sarah prepares fithariciof statertierats. Sarat nieg pretares manthly bank reconciluations and recoficies tha generw ledger to the aped acocumts recevable trial bulance. Bocause of the importance perpertunl totals monthh, on the last diary of ench ficeth. Solesclerks count all bivertory atter store hours ors tho last day of oach marrith for camparison with tha paipetunis. Af erveritory shartage report is prayidod 10 Mr. Tarid. The parpatunts are ndjusted by Sinrah nther Mr. Tara Fas approved the atdpustimerits: [2] Part 1: Instructions: a. Identily al COSO componertts of interral control? b. For the sales transacticn-related audit objective, identify all existing controls? c. For the cash receipts transaction-telated mudit objective, identify all existing controls? d. What are same porsible deficienciess in the storo's systerm? 6. How would you, as aud toe, nuggost ways to impoove their system
