Lamar LLC is in the process of updating its revenues and receivables systems with the implementation of new accounting software. James Loden, Inc. is an independent information technology consultant who is assisting Tamar with the project. James has developed the following checklist containing internal control points that the company should consider in this new implementation: Is the sales department separate from the credit office and the IT department? Are all collections from customers received in the form of checks? Is it appropriate to program the system for general authorization of certain sales, within given limits? Are product quantities monitored regularly? Required: In a two (2) page response, describe the control purpose for each point presented in the case
Lamar LLC is in the process of updating its revenues and receivables systems with the implementation of new accounting software. James Loden, Inc. is an independent information technology consultant who is assisting Tamar with the project. James has developed the following checklist containing internal control points that the company should consider in this new implementation: Is the sales department separate from the credit office and the IT department? Are all collections from customers received in the form of checks? Is it appropriate to program the system for general authorization of certain sales, within given limits? Are product quantities monitored regularly? Required: In a two (2) page response, describe the control purpose for each point presented in the case
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question #66: Lamar LLC is in the process of updating its revenues and receivables systems with the implementation of new accounting software. James Loden, Inc. is an independent information technology consultant who is assisting Tamar with the project. James has developed the following checklist containing internal control points that the company should consider in this new implementation:
- Is the sales department separate from the credit office and the IT department?
- Are all collections from customers received in the form of checks?
- Is it appropriate to program the system for general authorization of certain sales, within given limits?
- Are product quantities monitored regularly?
Required: In a two (2) page response, describe the control purpose for each point presented in the case.
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