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Help needed related to audit
04-09-2009, 07:52 PM
Post: #1
Help needed related to audit
Hi Friends

Well I Have a question to ask related to Audit.

Q1. What could go wrong in sales order over phone ?
Q2. Different types of relevent Controls for sales order over phone ?
Q3. What is Significant class of transaction and Flow of transaction ?

Please kindly explain me the following question with examples, so I can complete my assignment.
Thankyou

regards
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04-10-2009, 09:10 PM
Post: #2
 
Ans1
Well for sales done over phone can be
- fake sales booked because there's no evidence/genuineness of the phone caller. Also prank phone calls.
- line distortion can cause wrong recording/booking of order.
- Also if youre taking credit card or other info of the customer on phone, youre exposed to perpetrators/hackers/etc.

Ans2
-You could use some passcode or take some authentication questions from the caller.
-You can use the dial-back function to ensure there's no prank calls. Whenever a person calls, just note his number and call him back on that number.
-You could record phone calls as evidence for auditors
-Recording will also help in ensuring the quantity/particulars of the orders what was heard on the phone line.

Ans3
You seem to be from Ernst & Young o) .. well significant class of transaction is a 'process' which means how an entry started from the basics, and how it ended up in the trial balance. For example a Sales process would include entry from the inception when customer comes to the shop, and how the entry flew throughout different departments in the company and ended up in the TB. You perform system understanding on a Process, conduct walkthroughs for better understanding of the system, and then perform tests of controls which were identified in the system understanding.

Flow of transaction means how the entry moves on in an accounting system from inception till ending. For eg. a customer came, you raised a sales invoice. A dummy entry is raised in the system. Then the sales is approved by someone, then the dummy entry is cleared and entered in the system, then the sales causes the inventory to decrease, and cost of sales to increase, etc etc.. how an activity flows in the accounting system.

Hope this helps!
-Faraz Azhar
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