WWW Corp. sells its products to clients ranging from proprietorships to medium-sized entities. WWW is controlled by two family members, and most of the employees are casual staff employed during the busy seasons (November 1 through January 15, and May 1 through July 15). The company's managers feel that on-the-job training is adequate for their needs and that the labor savings from using temporary staff are reflected in the profits that WWW has earned for the family each year.
The company has made a niche in its market by guaranteeing excellent and quick customer service. When a customer order is received, either by phone or by fax, the customer service clerk (CSC) who takes the order checks that WWW has the goods in stock and the correct price by checking an online database of inventory on hand. If the goods are available, the clerk then personally phones the customer to verify the order, including both quantity and price for each item and the extension for the entire order. The clerk then prepares a sales invoice and faxes a copy to the customer. WWW'S policy is for the sales invoice to show a shipping date of one day from the order date. The clerk then walks to the warehouse (adjacent to the sales office), selects the goods, and takes them to shipping.
The company has a shipping staff of four people, and the shipping department will not ship any goods without a sales invoice initialed by the CSC. The shipping department is determined to reduce the number of shipping errors. This year, only nine shipments have occurred in which there was no sales invoice initialed and attached to the shipping bill. One of these turned out to be an urgent shipment to a long-time customer that was sent on the manager's verbal instructions. In that case, the shipping clerk noted that the manager had provided a sales invoice within one day for the shipping records. Another shipment resulted in the CSC being fired for fraud when it was discovered that he had sent a shipment of goods to a friend at below cost. Therefore, only the other seven shipments were considered to be true errors. If the sales invoice does not indicate who is to pay the shipping costs, then WWW sends the goods FOB shipping point. When a shipment occasionally is delivered to an incorrect address, it is the CSC's job to contact the customer and obtain the correct information. If the account is unpaid after the due date (30 days), the receptionist mails a reminder invoice to the customer. If the account remains unpaid after 60 days, the receptionist pulls the sales invoice and gives it to the CSC who made the sale. The CSC then is responsible for contacting the customer by phone to determine if there is a problem. -*
Required
Identify five different types of weaknesses or problems in WWW'S internal controls.