Identify an internal control procedure that would reduce each of the risks that follow in a manual system. Also, describe how (or if) an IT system could reduce these risks:
- Revenues may be recorded before the related shipment occurs.
- Employees responsible for shipping and accounts receivable may collude to steal goods and cover up the theft by recording fictitious sales.
- Credit memos may be issued at full price, when the goods were originally sold at a discount.
- Sales invoices may contain mathematical errors.
- Amounts collected on accounts receivable may be applied to the wrong customer.
- Duplicate credit memos may be issued for a single sales return.
- Sales invoices may not be prepared for all shipments.
- Shipments may contain the wrong goods.
- All sales transactions may not be included in the general ledger.