Question 5

I have to create a flow chart for 1) Sales Process and 2) Cash Receipts Process

V V of the existing system. c. Analyze the physical internal control weaknesses in the system. d. Describe the risks associated with these control weaknesses e. (Optional) Prepare a system flowchart of a rede- signed computer-based system that resolves the control weaknesses that you identified. Explain S U your solution. 5. GENERATORS R US (CENTRALIZED SYSTEM WITH DISTRIBUTED TERMINALS) Generators R Us (GRU) is a leading manufacturer of portable electric generators used for emergency power supply in both civil and private disaster situa- tions. GRU's primary customers are disaster recov- ery companies that assist home owners following flooding and other natural disasters. They also sell to building contractors, municipalities, and rental companies. The company publishes an industry cat- alog of generators and other auxiliary equipment, which it distributes to existing and prospective cus- tomers. GRU's headquarters and manufacturing CHAPTER 4 The Revenue Cycle 203 facilities are in Dallas, Texas, where they employ 125 manufacturing and clerical staff. GRU uses a centralized computer system with distributed terminals in its various departments. Recently, they have experienced operational pro- blems with their system and GRU management has hired your auditing firm to assess its operations and internal control procedures. Sales Order Procedures The revenue process begins in the sales department of the firm where customers submit orders by fax, e- mail, or phone. A clerk in the sales department cre- ates a sales order that details the items needed. Next, the sales clerk performs a credit check on the cus- tomer. If it is a returning customer, then the sales clerk checks the customer's payment history from the centralized credit records. For new customers, a full credit check is performed via an online credit bureau. Once the sales clerk approves the creditwor- thiness of the customer, he or she prints a sales order, a packing slip, and a stock release document from his terminal. The clerk adds a record to the digital af coles V V of the existing system. c. Analyze the physical internal control weaknesses in the system. d. Describe the risks associated with these control weaknesses e. (Optional) Prepare a system flowchart of a rede- signed computer-based system that resolves the control weaknesses that you identified. Explain S U your solution. 5. GENERATORS R US (CENTRALIZED SYSTEM WITH DISTRIBUTED TERMINALS) Generators R Us (GRU) is a leading manufacturer of portable electric generators used for emergency power supply in both civil and private disaster situa- tions. GRU's primary customers are disaster recov- ery companies that assist home owners following flooding and other natural disasters. They also sell to building contractors, municipalities, and rental companies. The company publishes an industry cat- alog of generators and other auxiliary equipment, which it distributes to existing and prospective cus- tomers. GRU's headquarters and manufacturing CHAPTER 4 The Revenue Cycle 203 facilities are in Dallas, Texas, where they employ 125 manufacturing and clerical staff. GRU uses a centralized computer system with distributed terminals in its various departments. Recently, they have experienced operational pro- blems with their system and GRU management has hired your auditing firm to assess its operations and internal control procedures. Sales Order Procedures The revenue process begins in the sales department of the firm where customers submit orders by fax, e- mail, or phone. A clerk in the sales department cre- ates a sales order that details the items needed. Next, the sales clerk performs a credit check on the cus- tomer. If it is a returning customer, then the sales clerk checks the customer's payment history from the centralized credit records. For new customers, a full credit check is performed via an online credit bureau. Once the sales clerk approves the creditwor- thiness of the customer, he or she prints a sales order, a packing slip, and a stock release document from his terminal. The clerk adds a record to the digital af coles