FoodRUs plc
You have been hired as Systems Consultant at FoodRUs plc and in your first meeting with the Finance Director (FD) you have been told that they have many system control problems with the revenue cycle.
FoodRUs run a national chain of ‘Cash and Carry’ wholesale warehouses which supply food retailers, such as small corner shops and caterers. If the customer has a credit approval they can buy on account, other customers will have to pay at the time of purchase. They have recently started selling a selection of their merchandise online using what they believe to be a secure portal.
Debtors balances are incorrect, transaction processing is producing situations in which the total sales in the general ledger does not reconcile to the cash book and the accounts receivable ledger.
You have been asked to review the system and produce a report that details potential weaknesses in internal control within and surrounding the revenue system.
In the first instance you decide to produce a report which gives an explanation of some of the control issues you would be looking to assess. Your report should include the following
An explanation of what you understand by the phrase ‘internal control’
Descriptions, with examples, of what controls you would expect to see in FoodRUs and particularly surrounding the revenue cycle sub-system. In answering the question please be careful, where appropriate, to distinguish correctly between:-
Control objective (eg to ensure all data is processed accurately and completely)
Types of control (eg management, applications, protection, environment, preventive detective and corrective)
Control techniques (validation checks; verification checks)
Control type (check sum/digit; check twice)
Notes
It is anticipated that your work will cover all relevant aspects of the control of the revenue cycle. Note should be taken of the fact that the organisation also makes Cash and Internet Sales.
The overall length should be around 1500 words (with a 10% margin) Any significant deviation from this length will be penalised. All work must be word processed and contain a word count.
Your discussion should, as far as possible, show evidence of original thought.
The Revenue Cycle
In order to assess your coursework it has been benchmarked against the work of other students using the guidelines below.
In order to maintain consistency of marking, a sample of work has been internally moderated.
I have been guided in my assessment by the following:
Assessment criteria, with weightings:
Planning and structure (10%) E G A S I
Explanation of revenue sub system
With examples (20%) E G A S I
Description of Control Issues (30%) E G A S I
Coherence of discussion on weaknesses (20%) E G A S I
Use, appropriateness and referencing of examples (10%) E G A S I
Standard of presentation (10%) E G A S I
E = Excellent (70%+) G = Good (60%+) A = Average (50%+)
Satisfactory (40%+) I = Inadequate (<40%)
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