ESTRELLA, Jasmin Ann C.

2013-20162
Risk Assessment

Ref No. Process Subprocess Risks Nature of Risk Likelihood of Significant Impact Response Response Description
Happening

Strategic Certain Extreme Avoid

Probable High
Operational Possible Medium Reduce
Reporting Unlikely Low Share
Compliance Remote Negligible Accept

A.1 Receive Order 1. Sales deparment receives customer order > Incomplete or inaccurate customer Reporting Possible Low Reduce Internal Control (see A.1.1.)
orders
> Orders are not received Strategic/Reporting Possible Low Reduce Internal Control (see A.1.2.)
> Fake buyers Reporting Possible Low Reduce Internal Control (see A.1.3.)
> Miscommunication between the Operational/Reporting Possible Low Reduce Internal Control (see A.1.4.)
customer and the salesman
> Delay in respoding to or receiving Operational Possible Low Reduce Internal Control (see A.1.5.)
customer orders
A.2 Receive Order 2. Sales department prepares sales order > Incomplete or wrong orders are Operational/Reporting Possible Medium Reduce Internal Control (see A.2.1.)
encoded
> Orders are tagged to wrong cusomers Operational/Reporting Possible Medium Reduce Internal Control (see A.2.2.)

> Wrong customer informations are Operational/Reporting Possible Medium Reduce Internal Control (see A.2.3.)
encoded
> False documents Reporting Unlikely High Avoid Internal Control (see A.2.4.)
B.1 Credit Check 1. Credit deparment checks credit record of customer > Gets misleading informations Operational Possible Low Reduce Internal Control (see B.1.1.)
> Bad paying history Operational Possible Low Reduce Internal Control (see B.1.2.)
> Unauthorized credit limit Operational Possible Low Reduce Internal Control (see B.1.3.)
B.2 Credit Check 2. Credit deparment approved sales order > Unauthorized approval Operational Possible Medium Reduce Internal Control (see B.2.1.)
> Data are overlooked Operational Possible Medium Reduce Internal Control (see B.2.2.)
B.3 Credit Check 3. Sales department release documents in customer open > Wrong documents are sent to the Strategic/Operational Unlikely Medium Reduce Internal Control (see B.3.1.)
order file to other departments departments
C.1 Pick Goods 1. Warehouse verifies stock release > Theft, Damage to goods Operational Possible High Avoid Internal Control (see C.1.1.)
> Stock-outs or excess inventory Operational Possible High Avoid Internal Control (see C.1.2.)
> Wrong confirmation of goods Operational Unlikely High Avoid Internal Control (see C.1.3.)
C.2 Pick Goods 2. Warehouse adjust the stock records > Wrong informations are recorded Reporting Possible Medium Reduce Internal Control (see C.2.1.)
D.1 Ship Goods 1. Shipping deparment prepares bill of lading > Theft, Damage to goods Operational Possible High Avoid Internal Control (see 4.1.1.)
> Bill of lading disharmonized with Operational/Reporting Unlikely High Avoid Internal Control (see 4.1.2.)
shipping notice
> Release wrong goods or wrong Strategic/Operational Unlikely High Avoid Internal Control (see 4.1.3.)
quantity
D.2 Ship Goods 2. Shipping department delivers the goods to the customer > Delivered to wrong customer Strategic/Operational Unlikely High Avoid Internal Control (see 4.2.1.)

> Goods delivered are wrong Strategic/Operational Possible High Avoid Internal Control (see 4.2.2.)
> Theft, Damage to goods Strategic/Operational Possible High Avoid Internal Control (see 4.2.3.)
> Delay or failure to ship Strategic/Operational Possible High Avoid Internal Control (see 4.2.4.)
> Duplication of delivered goods Strategic/Operational/Repo Unlikely High Avoid Internal Control (see 4.2.4.)
rting
D.3 Ship Goods 3. Shipping department records the shipment in the shipping > Error in maintaining records Reporting Possible Medium Reduce Internal Control (see 4.3.1.)
log
E.1 Invoicing 1. Billing deparment prepares invoice > Wrong valuation of goods Reporting Possible High Avoid Internal Control (see E.1.1.)
> Failure to bill customers Strategic/Reporting Unlikely High Avoid Internal Control (see E.1.2.)
> Billed to wrong customer Strategic/Reporting Possible High Avoid Internal Control (see E.1.3.)
> Duplication of invoice Reporting Possible High Avoid Internal Control (see E.1.4.)
E.2 Invoicing 2. Billing deparment updates sales journal > Innacurate accounting records Reporting Possible High Avoid Internal Control (see E.2.1.)
> Theft Reporting Possible High Avoid Internal Control (see E.2.2.)
E.3 Invoicing 3. AR Contol department updates AR subsidiary ledger > Error in maintaining customer Reporting Possible High Avoid Internal Control (see E.3.1.)
accounts
> Innacurate or invalid credit memo Reporting Possible High Avoid Internal Control (see E.3.2.)
E.4 Invoicing 4. Inventory Control updates Inventory subdiary ledger > Error in maintaining inventory Reporting Possible High Avoid Internal Control (see E.4.1.)
records accounts
E.5 Invoicing 5. General Ledger deparment updates general ledger > Innacurate accounting records Reporting Possible High Avoid Internal Control (see E.5.1.)
 ESTRELLA, Jasmin Ann C. 2013-20162

Info. Processing Objectives Manual or Preventive or Frequency of

Ref No. Control Activity Description (Completeness, Accuracy, Validity, PCAOB Assertions
Restricted Access) Automated? Detective? Control

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A.1.1 Provide a checklist for all the information needed to secure completeness of data X M/A P/D Daily X X

A.1.2 Review of the system being used X M/A P/D Daily X X X X X

A.1.3 Orders not accepted unless credit limits reviewed first; Customer data should be checked X A P Transactional X X X
thoroughly
A.1.4 Respond politely; Customer queries and complaints should be handled independently X M D Multiple Times a X X
Day
A.1.5 Assign a department that will be solely responsible for all the customer orders being X M/A D Multiple Times a X X X X X
received Day
A.2.1 Open-order file is maintained and reviewed X X M/A P/D Daily X X X X X
A.2.2 Sales orders and matching documents required for all entries X X M/A P/D Transactional X X X X X
A.2.3 Test application controls for proper classification X X M D Multiple Times a X X
Day
A.2.4 Authorization by senior staff required for changes in other customer data X X M D Transactional X X X
B.1.1 Review entity's procedures for granting credit to customers X X A P Transactional X X X
B.1.2 Senior staff authorization, references/credit checks for new customers X A P Daily X X X
B.1.3 Orders not accepted unless credit limits reviewed first X A P Transactional X X X
B.2.1 Authorization of senior staff required X X M D Transactional X X X X X
B.2.2 Review entity's procedures for granting credit to customers X X M D Transactional X X X
B.3.1 Open-order file is maintained and reviewed X X M D Daily X X X X X

C.1.1 Segregation of duties; Regular monitoring of inventory X X M D Weekly X X X X X

C.1.2 Regular monitoring of inventory X X M D Weekly X X X X X
C.1.3 Segration of duties; Regular monitoring of inventory X M D Weekly X X X X X
C.2.1 Codes in place for different types of products or services X X X M/A P/D Daily X X X
D.1.1 Segregation of duties; Regular monitoring of inventory X X M D Weekly X X X X X
D.1.2 Sales invoices and matching documents required for all entries X X X M D Transactional X X X X X

D.1.3 Assign a team to double check the goods before release X X X M D Daily X X X X X
D.2.1 Sales invoices and matching documents required for all entries X X M D Weekly X X X X X
D.2.2 Sales invoices and matching documents required for all entries X X M D Weekly X X X X X
D.2.3 Segregation of duties; Regular monitoring of inventory X M D Weekly X X X X X
D.2.4 Provide a time table for delivery and observe strict compliance X M/A Daily X X
D.2.5 Segregation of duties; Regular checking of records X X M D Weekly X X X X X

D.3.1 All shipping documentation is forwarded to the invoicing section on a daily basis X X M/A P/D Multiple Times a X X
Day
E.1.1 Segregation of duties; assign a department that will check the correct valuation X X M/A P/D Multiple Times a X X X X X
Day
E.1.2 Assign a person to double check if customers are already billed; Send out monthly X X X M D Multiple Times a X X X X X
customer statements (Observe strict compliance) Day
E.1.3 Double check the monthly statements being given to the customers X X X M/A P/D Monthly X X X X X
E.1.4 Prenumbered invoices for sequence X X X X A P Multiple Times a X X
Day
E.2.1 Review sales journal for proper classification; Test application controls for proper codes X X X X M D Daily X X

E.2.2 Segregation of duties X X X X M D Multiple Times a X X X X X

Day
E.3.1 Review sales journal for proper classification; Test application controls for proper codes X X X X M D Monthly X X

E.3.2 Segregation of duties; Test application controls for codes X X X X M D X X X X X

E.4.1 Review Inventory Subsidiary Ledger for proper classification; Test application controls for X X X X M D Monthly X X
proper codes
E.5.1 Review General Ledger for proper classification; Test application controls for proper codes X X X X M D Monthly X X

Completeness - Completeness, Cut-off, Existence/Occurrence, Rights & Obligations

Accuracy - Accuracy, Classification, Valuation and Allocation
Validity - Existence/Occurrence, Cut-off, Rights & Obligations
Restricted Access - Most, except for Rights & Obligations