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Question 3 You are an auditor senior at CwP & Associates, and you are currently reviewing the documentation of your audit client's, Proximo Ltd,
Question 3 You are an auditor senior at CwP & Associates, and you are currently reviewing the documentation of your audit client's, Proximo Ltd, payroll system as detailed below: Sales orders are mainly placed through Proximo's website, but some are made via telephone. Online orders are automatically checked against inventory records for availability; while telephone orders are checked manually by order clerks after the call. A follow-up call is usually made to customers if there is insufficient inventory. When taking telephone orders, clerks note down the details on plain paper and afterwards they complete a three-part pre-printed order form. These order forms are not sequentially numbered and are sent manually to both the dispatch and the accounts departments. As the company is expanding, customers are able to place online orders which will exceed their agreed credit limit by 15%. Online orders are automatically forwarded to the dispatch and accounts department. A daily pick list is printed by the dispatch department and this is used by the warehouse team to dispatch goods. The goods are accompanied by a dispatch note (GDN) and all customers are required to sign a copy of this. On return, the signed GDNS are given to the warehouse team to file. The sales quantities are entered from the GDN and the authorised sales prices are generated by the invoicing system. If a discount has been given, this has to be manually entered by the sales clerk onto the invoice. Due to the expansion of the company, and as there is a large number of sale invoices, extra accounts staff have been asked to help out temporarily with producing the sales invoices. Normally it is only two sales clerks who produce the sales invoices. Required (10 marks) Identify and explain FIVE deficiencies in Proximo's sales and dispatch system and provide a recommendation to address each of these deficiencies.
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