12.6.
Create a questionnaire checklist that can be used to evaluate controls for each of the four basic activities in the revenue cycle (sales order entry, shipping, billing, and cash collections).
Required
* a. For each control issue, write a Yes/No question such that a “No” answer represents a control weakness. For example, one question might be, “Are customer credit limits set and modified by a credit manager with no sales responsibility?” * b. For each Yes/No question, write a brief explanation of why a “No” answer represents a control weakness.

Sales Order Entry 1. Are there data entry application controls in place?
The answer is no which represents the weakness in that you risk inaccurate or incomplete customer orders.

Shipping 2. Is there a separation of shipping and billing functions? This answer no represents weakness in that there a risk of sending wrong merchandise, wrong quantities, and wrong addresses.

Billing 3. Are there adequate data entry checks? This answer no represents a weakness in that it errors in billing.

Cash Collection 4. Is there a periodic reconciliation of bank statements with records by someone not involved in cash receipts processing? 5. Is there a segregation of duties? The answer no to either of these questions represents a threat in that there is a higher risk of fraud or theft.

13.5.
Use Table 13-2 to create a questionnaire checklist that can be used to evaluate controls for each of the basic activities in the expenditure cycle (ordering goods, receiving, approving supplier invoices, and cash disbursements).
Required
* a .For each control issue, write a Yes/No question such that a “No” answer represents a control weakness. For example, one question might be “Are supporting documents, such as purchase orders and receiving reports, marked ‘paid’ when a check is issued to the vendor?” * b .For each Yes/No question, write a brief explanation of why a “No” answer represents a control weakness.
Ordering Goods
Receiving
Is there recognition of purchase orders with receiving slips?
The answer no to this question represents a weakness in that receipt of orders could be incorrect resulting in goods not ordered or too much product.

Approving Suppliers Invoices

Are supplier’s invoices approvals done by a manager? The answer no to this question represents a weakness in that no approval and verification can lead to a risk not verifying invoice accuracy can result in errors posted to accounts payable.

Are signatures on proper documents? The answer no to this question represents a weakness in that improper signatures leads to a risk that invoices are incorrect.

Cash Disbursements

Are records checked for accuracy? The answer no to this question represents a weakness in that cash disbursements may be inaccurate causing errors.