Exercise 4 - Internal Control & Governance

A sales system for a small retail store is described in the following paragraph. Once you have read the paragraph, identify and briefly explain about the following:

1. Main five risks identified within the following sales system;

2. The potential consequences of those five risks,

3. Controls that could be implemented to combat those five risks.

The sales system: As a sale occurs, customer details including customer number and address, as well as the items purchased, are written on a blank invoice form. Item descriptions, quantity sold and unit price are also filled in, with the sales staff having some discretion in setting the unit price for situations such as bulk purchases or repeat customers. These invoice forms are collected at the end of the day and keyed in to the computer, with an invoice number assigned to invoices as they are keyed in. This number is recorded on the store copy of the invoice. Any new customers are added to the customer master list as their sales are entered and any details not gathered on the invoice are left blank. Data are stored on a central server and this server is backed up monthly. The system is also connected up to the organisation's suppliers and used to order goods.