Questions
1. Identifyspecificrisks in the shipping process (at least 3).
2. Make aspecificdetective control for each risk you identified in question 1ANDmake aspecificpreventive control for each risk you identified in question 1. So each risk will have 2 corresponding controls. Be sure to clearly identify and explain each control as either detective or preventative.
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 SAP. 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 product ordered is pulled from the warehouse by shipping personnel according to the 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 prepare a bill of lading including the carrier information using a pre-numbered 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 pre- numbered bill of lading documents and manually entering information from the bill of lading document in a spreadsheet that is maintained by shipping clerks. The spreadsheet is referred to as the "orders shipped log." Another copy is forwarded to shipping data entry personnel who confirm the order as shipped, thus completing the shipping process within the system. Once an order is marked as shipped, line items in the sales order will change automatically in the system, which will result in closing the shipped lines and staging of the line items to be invoiced. Only the lines on the sales order that ship will be invoiced Open lines are back-ordered and will remain open until those items are shipped. The only other way to close a line on an order is to reject the line, which requires approval by a customer service manager. Each day, the SAP system compiles the staged invoices in a daily open invoice report. The orders shipped log and the daily open invoice report are reviewed by the warehousedirector daily to verify that all orders shipped have also been included in the invoicing batch. The warehouse director compares the shipments recorded on the daily open invoice report to the shipments logged on the manual orders shipped log as being shipped 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 SAP 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 the ending pre-numbered bill of lading from the prior day to the start of the pre- numbered bills of lading for the current day and then comparing the ending pre- numbered bill of lading for the current day to the bill of lading detail to verify that the last pre-numbered 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.Shipping and Invoicing End of Month - Sales Classification Review Process Accounting Marager reviews GAAP sales Accounting Manager Non-Standard Transaction makes necessary Order Reports for the entire month classification adjustments Processing o ensure sales are classified correct? manually to record properly under GAAP. based on GAAP, Outgoing SAP Yes Inventory List Stockroom personnel On a sample basis, the print outgoing Accounting Marager reviews Accounting Manager inventory list, pull the coding, supporting GAAP sales makes necessary Inventory, and transfer documentation and recorded classification adjustments to shipping journal entries; any non- correct? manually to record standard coding is reviewed in based on GAAP detail and resolved. SAP Shipping personnel verify hem & End quartity Shipping & Invoicing Bil of Lading End of Quarter - Sales Disclosure Footnote Review Shipping personnel Financial The Controller record carrier details Statement are performs a review of on Bill of Lading Orders complied on a Financial Statement & End Shipped Log quarterly basis Footnote Disclosures. Shipping personnel record shipment Daily Open Non-Standard data into a dally log Invoice Transaction Report Report SAP records Revenue, AR, Shipping personnel TAP systematically Warehouse Director Inventory, and COGS record shipment stages line kems on In G/L sales orders to be reconciles Orders data and finalize the Differences Involved in batch Shipped Log and noted? SAP order as "shipped" based on "shipped" Daily Open Invoice in SAP SAP status SAP Report SAP performs a 3 way match of sales order, bill of lading, and Invoice data Warehouse Director SAP approves invoice batch for processing in SAP SAD
