You are in$-$charge auditor examining the financial statements of Bluth Corporation for the year ended December $31.$ As a part of the preliminary risk and control environment evaluation, you have identified the following control activities pertaining to Bluth Corporation's revenue cycle:

All invoices are priced according to the authorized price list maintained on the computer. Either the regional or divisional sales manager must approve any exceptions.

All shipping documents are prenumbered and periodically accounted for. Shipping document references are noted on all sales invoices.

All merchandise returns must be received by the receiving department and recorded on prenumbered documents for receipts. A document is created for each item. Returns are sent to quality control for testing, and recommendation for ultimate disposition is made $($scrap$,$ rework and sell as second, or close out as$-$is$),$ noted, and sent to accounting for proper inventorying.

The quantity of items invoiced is reconciled with the packing document developed on receipt of the order and the shipping notice by a computer program as the goods are marked for shipment. If discrepancies appear, the shipping document prevails. A discrepancy report is prepared daily and sent to the warehouse manager for follow$-$up$.$

The company pays all freight charges, but the customer is charged a freight fee based on a minimum amount and a sliding scale as a percentage of the total invoice. The policy is documented and the computer automatically adds the charge..