Please help guys. Thank you so much.

What are the relevant controls that address the risks in the order processing sub- process within the revenue process for ABC? How does the relevant guidance differ for an audit conducted in accordance with the AICPA standards? 1. btain an understanding of the flow of transactions in ABC's revenue process, the To o engagement team has obtained a revenue process narrative and revenue process flow diagram from the Company (see Handout 1) Process flow diagrams are a tool we can use to depict the process to initiate, authorize, process, record, and report transactions, the points within the process at which misstatements could occur, and control activities that are designed to prevent or detect such misstatements, including providing greater transparency to segregation of duties. These diagrams also depict the relevant systems and information produced by the entity Below is an excerpt from ABC's revenue process narrative and process flow diagram. For this excerpt, only two of the five sub-processes are included: (1) order processing and (2) shipping and invoicing (sales returns, payment processing, and monitoring of accounts receivables have been excluded). Revenue Order Processing Orders are received via fax, mail, e-mail, or phone. Customer service associates (CSAs) are responsible for monitoring incoming orders that arrive at the business center. All faxes and postal mail are electronically converted by CSAs and input into the system. Telephone orders are directed to a central call number and an available CSA takes the order information. All orders must be created with reference to a customer account that is established in the customer master file within Great Plains, the Company's information technology system. If an order is received for a nonexisting account, the new account procedure is followed whereby a credit analyst reviews the credit worthiness of the customer on the basis of a Dun & Bradstreet credit report. When credit is denied, the order process ends and the customer is notified of the credit decision. If credit is extended, a credit analyst creates a new customer account in the customer master file and requests that a CSA process the order When an order is entered in Great Plains, "sold to" and "ship to fields must be populated with a valid customer number that matches the established customer number in the customer master file. Fields for sales and payment terms are automatically populated with the information contained in the customer master file in Great Plains. All line items on the sales order are systematically populated based on the information in the master pricing file Sales orders are configured with the following mandatory fields: sales order type (e.g, a rush order or a stock order), order source (e.g, fax, mail, e-mail, phone), sales organization, purchase order number. the customer master file or pricing master file records. Sales to custo sold-to and ship-to account numbers, item quantities, material nur The balance of the information is automatically extracted from mbers, and Page 3 ard payment or shipping terms are automatically flagged in Great Plains; the nonsare used in the shipping and invoicing process to generate exception reports for ment review. Pricing for each customer may differ on the basis of negotiated manage contracts, which are configured against the master pricing file with customer-specific discounts applied When orders are placed on hold because of an account or credit hold, the credit department is notified. A credit analyst will review the hold and determine whether the hold can be resolved. If the hold cannot be resolved, the credit analyst will notify the customer of the order cancellation, thus ending the order entry process. If after an investigation the hold can be resolved, the credit analyst will release the hold and submit the order to a customer service manager for review. All processed orders must be reviewed and approved by a customer service manager before they are submitted for shipping and invoicing. If errors are discovered, they are resolved by the CSAs and the order is resubmitted through the process. After a sales order is approved, it is released and updated in Great Plains. Shipping and Invoicing After a sales order is approved, the data is transferred automatically from the order entry system to the shipping and invoicing modules in Great Plains. Outgoing inventory lists are printed by the stockroom personnel. Outgoing inventory list quantities are populated systematically based on information defined in the approved sales orders. the warehouse b The product ordered is pulled from information defined on the outgoing inventory lists. The shipping personnel will verify the information, such as item and quantity, and package the item for shipment. After the order is prepared for shipment, the shipping personnel prepares a bill of lading including the carrier information, using a prenumbered bill of lading form. The bills of lading are on carbon paper which contain multiple copies of the bill of lading. Shipments of goods to customers are logged, this is completed by using carbon copies of the prenumbered bill of lading documents and manually entering information from the bill of ing clerks. The spreadsheet is referred to as the "orders shipped log." Another copy is forwarded to shipping data entry perso within the system nnel who confirm the order as shipped, thus completing the shipping process Once an order is marked as shipped, line items in the sales order will change automatically in the system, whi the line items to be invoiced. Only the lines on the sales order that ship will be invoiced ch will result in closing the shipped lines and staging of Ope n lines are back-ordered and will remain open until those items are shipped. The only on an order is to reject the line, which requires approval by a other way to close a line customer service manager h day, the Great Plains system compiles the staged invoices in a daily open invoice t The orders shipped log and the daily open invoice report are reviewed by the Each diector daily to verify that all orders shipped have also been included in the woicing batch. The warehouse director compares the shipments recorded on the daily onen invoice report to the shipments logged on the manual orders shipped log as being d to a customer. If differences are noted, the warehouse director works with shipping personnel to ensure shipments are recorded in the system accurately. If no differences are noted, the batch is approved in Great Plains for invoice processing. The warehouse director's review consists of the following steps The warehouse director verifies that all bills of lading for a specific day are included in the orders shipped log. This verification is performed by comparing . nding prenumbered bill of lading from the prior day to the start of the e e prenumbered bill of lading for the current day, and then comparing the ending prenumbered bill of lading for the current day to the bill of lading detail to verify that the last prenumbered bill of lading for the date was properly included. This step ensures that all numbers in the sequence are properly accounted for The warehouse director reconciles the daily open invoice report to the daily orders shipped log and verifies that all shipments listed in the orders shipped log were also listed in the daily open invoice report for the same day . The warehouse director evidences his review by writing check marks (or some other form of indication) beside each reconciled customer shipment listed on the reports and by signing and dating the reports upon completion of his review . When any discrepancy exists as a result of his reconciliation of the daily open invoice report and the orders shipped log, the warehouse director writes an "X" (or some other form of indication) beside the line item and investigates the . discrepancy .For each discrepancy, the warehouse director works with shipping personnel to resolve the difference. Documentary evidence is obtained to support the resolution of the difference formed nightly via Great Plains through a systematic batch process. The ematic matching with the purchase order and bill of lading/shipped status, Invoicing is per Great Plains system performs a three-way match; invoices can only be processed when ther completing a three-way match to generate the invoice. The invoice generation process (1) updates the general ledger, (2) records the sale (recognizes the revenue) and the receivable, (3) relieves the inventory, and (4) records cost of goods sold. As part of the nightly batch process, the Great Plains system generates a report that lists every flagged transaction that contains nonstandard sales or shipping terms, this report is called the "nonstandard transaction report. Start Customer Service Associate receives Customer Service Sales and Payment Master File?Asaciate enters order data ieto SAPTerm SAP SAP Credit Analyst SAP prices order ystematially based credit based on D&I credit report SAP Credit Analya Credit Approved? Credit Analyst reviews the customer account Hold issue cont acts oustomer account or credit hold? End to ieform them of arder cancellation. No End Yes Customer Service Manager reviews and orders for validity and accuracy Order Credit Analyst Customer Master Sales order is released and updated in SAP Shipping & Fle in SA SAP ls order comect? SAP Shipping and Invoicing End of Month-Sales Classification Review Process propery under CAP SAP to shipging manually to Shipping penonnel End of Quarter-Sales Disclosure Footnote Review Shippling perionnel carrier detalls on Bill of Lading Financia Statement are complied on a quarterly bass The Controler performs a review of Foctnate Disciosures Shipping personnel record shipment data into a dally log SAP record Revenue, AR nventory, and COGSDA Warehoue Director reconcles Orders Shipping personnel tages ine items on sales arders to beShipped Log and nvokced in batch SAP data and finallse thea Dailly Open evoice order as "shipped n SAP SAP way match of sales order, bil of lading and invoice data Warehoune DirectorSAP approves invoice atch for processing n SAP