Internal control procedures

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QUESTION 1 – A. INTERNAL CONTROL PROCEDURES
ISSUING CREDIT NOTE
POLICY

* The Director General authorized amounts which are over $50,001.00
The General Manager of Administration and Finance approved credit notes, which are amounts of $1.00 to $50,000.00. Commercial general Management, request and justify the issuance of a credit note.

CREDIT NOTES ISSUED:

* By amendment ofpurchase price.
* By decrease in the number of items deliverers to the customer
* By differences in the workplace and variation in the characteristics of print requested and delivered to you.
* For discounts, sales returns or sales.
* Redeem for discounts made by customer for more raw materials delivered by contract.
* For waste not returned
* For penalty for delivery inuntimely

INTERNAL CONTROL PROCEDURES ISSUING CREDIT NOTES

N. | RESPONSIBLE | ACTIVITY DESCRIPTION |
1 | Customer | The client requests to the General Manager Commercial, credit note is issued; the source and reason justify your claim. |
2 | Commercial General Management | Commercial General Management, requested the General Manager of Administration and Finance credit note, with supportingdocumentation justifying their origin |
3 | General Manager of Administration and Finance | General Manager of Administration and Finance receives the request and passes to the Finance Manager with supporting documentation. |
4 | Accounting Department | If the request is accepted Accounting Department proceeds to credit note based on the supporting documentation that has been annexed and thearea turns to applicant’s signature. |
5 | Commercial General Management | Signs the credit note and send with the documents annexed to the accounting Department. |
6 | Accounting Department | Send the original credit note to the customer. Also, send a copy of the credit note to General Commercial Management and another copy is keep in Accounting Department for control and recording. |
WRITINGOFF BAD DEBTS
POLICY

* Accounts Receivable Department is responsible for analysing their outstanding accounts receivable and creating a provision for accounts deemed doubtful or uncollectible. Annually, it will request the write-off of uncollectible accounts.
* Accounting Departments are responsible to ensure that bad debts expenses are recorded in their accounts properly and in atimely.

INTERNAL CONTROL PROCEDURES WRITING OFF BAD DEBTS
N. | RESPONSIBLE | ACTIVITY DESCRIPTION |
1 | Accounts Receivable Department | Calculate allowance for doubtful accounts: Review the aged accounts receivable listing for balances that are specifically identifiable as credit risks or uncollectible. |
| | Documentation: Documentation held on file at the departments should support thebalance in the allowance for doubtful accounts. This documentation should include support as to the methods implemented by departments to collect the receivable and the reason(s) why it may be uncollectible. |
2 | Accounting Department | ADJUST GENERAL LEDGER: Prepare a total of the revised allowance amounts and compare it with the general ledger allowance account balance. |
3 | AccountsReceivable Department | Write – off Accounts receivable form: Review outstanding amounts in the allowance. Identify accounts that are truly uncollectible and should be written off. Prepare the Write-off of Uncollectible Debts form. |
4 | Accounting Department | Is responsible for preparing a consolidated file of write-off data for submission to General Manager of Administration and Finance for formalapproval. |
5 | General Manager of Administration and Finance | Received the Write – off Accounts receivable form and sign it to approval. |
6 | All departments | Only after approval is granted by General Manager of Administration and Finance are departments permitted to reduce accounts receivable ledgers for the write-off submitted. |

PAYMENT OF WAGES
POLICY

* For control purposes...
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