Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Slides:



Advertisements
Similar presentations
Chapter 14 Audit of the Sales and Collection Cycle
Advertisements

Chapter 12 The Revenue Cycle: Sales to Cash Collections Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12-1.
CHAPTER 14 AUDITING THE REVENUE CYCLE Fall 2007
Modern Auditing: Assurance Services and the Integrity of Financial Reporting, 8th Edition William C. Boynton California Polytechnic State University at.
The Revenue Cycle: Sales to Cash Collections
Chapter 7 Customer Order and Account Management Business Processes
BA 427 – Assurance and Attestation Services Lecture 4 Internal Controls: Sales and Receivables.
Systems Flowcharts Please use speaker notes for additional information!
Chapter 1 Accounting Information Systems and Firm Value
Pertemuan 5 Modeling Business Processes Matakuliah: M0034 /Informasi dan Proses Bisnis Tahun: 2005 Versi: 01/05.
Chapter 12 The Revenue Cycle: Sales to Cash Collections Copyright © 2012 Pearson Education 12-1.
Chapter 11 THE REVENUE CYCLE. Introduction Revenue cycle: 1. Respond to customer inquiries 2. Develop agreements with customers to provide goods and services.
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart1 of 85 C HAPTER 1 Accounting Information Systems: An Overview.
Pertemuan 17 The Sales/Collection Business Process Matakuliah: M0034 /Informasi dan Proses Bisnis Tahun: 2005 Versi: 01/05.
Collecting and Reporting Accounting Information Design of an effective AIS begins by considering outputs from the system. Outputs of an AIS include: 1.
Sales & Cash Receipts Transactions By David N. Ricchiute
Chapter 7 Revenue and Collection Cycle “What at first was plunder assumed the softer name of revenue.” Thomas Paine McGraw-Hill/IrwinCopyright © 2008 by.
Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions Chapter 14.
Sales/Collection Process
The Revenue Cycle: Sales to Cash Collections
Auditing The Revenue Cycle Prepared by: Sartini, S.E., M.Sc., Akt.
Chapter 10 Prepared by Richard J. Campbell Copyright 2011, Wiley and Sons Auditing Revenue Processes: Sales, Billing, and Collection in the Health-Care.
Chapter 4 Internal Controls McGraw-Hill/Irwin
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A. Aseervatham and D. Anandarajah. Slides prepared by Kaye.
PowerPoint Presentation Materials
Accounting systems design & evaluation
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
CHAPTER 11 SUBTANTIVE AUDIT TESTING: Revenue Cycle
Introduction Business Process Fundamentals
Chapter 15, Section 1 Purchasing Items Needed by a Business
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions Chapter 14 Arens et.al.,
Flowchart and Data Flow Diagrams
PowerPoint Presentation Materials
The Acquisition/Payment Process
0 Glencoe Accounting Unit 5 Chapter 24 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved. Unit 5 Accounting for Special Procedures Chapter.
THE SALES/COLLECTION BUSINESS PROCESS
Copyright  2003 Pearson Education Canada Inc. CHAPTER 12 Audit of the Sales and Collection Cycle: Tests of Controls.
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Business Driven Technology Unit 1
The Revenue Cycle Yan Xiong Merle P. Martin College of Business CSU Sacramento 3/11/03.
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 7 – 1 Chapter 7 Customer Order and Account Management.
Auditing the Revenue Cycle. Learning Objectives After studying this chapter, you should: Understand the operational tasks associated with the revenue.
By Hollander, Denna, Cherrington PowerPoint slides by: Bruce W. MacLean, Faculty of Management, Dalhousie University Accounting, Information Technology,
McGraw-Hill/Irwin © 2013 The McGraw-Hill Companies, Inc., All Rights Reserved. Chapter 12 Sales/Collection Process.
AUDITING SALES AND CASH RECEIPTS
SOURCE DOCUMENTS Chapter 6.2. Source Documents A business paper that shows the nature of a transaction and provides all of the information needed to account.
Overview of the Revenue Cycle September 25, 2015.
Copyright  2003 Pearson Education Canada Inc. CHAPTER 12 Audit of the Sales and Collection Cycle: Tests of Controls.
CHAPTER 11 SALES AND COLLECTION CYCLE: TESTS OF CONTROL AND SUBSTANTIVE TESTS OF TRANSACTIONS.
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder ©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder.
©2012 Prentice Hall Business Publishing, Auditing 14/e, Arens/Elder/Beasley Audit of the Sales and Collection Cycle: Tests of Controls and Substantive.
Chapter 10 Marketing/Sales/Collection/Customer Support Process: Recording and Evaluating Revenue Process Activities.
Auditing the Sales and Collections Cycle Chapter 14.
Audit of the Sales and Collection Cycle. Identify the accounts and the classes of transactions in the sales and collection cycle. Describe the business.
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
© 2014 Cengage Learning. All Rights Reserved. Learning Objectives © 2014 Cengage Learning. All Rights Reserved. LO1 Explain the purpose of entering the.
Auditor’s Process in Considering Tests of Controls and Substantive Tests of Details of Tx.
Customer Order and Account Management Business Processes Chapter 7.
Accounts Receivable, Accounts Payable & Cash
Acquisition/Payment Process
Overview of the Revenue Cycle
Modern Auditing: Assurance Services and the Integrity of Financial Reporting, 8th Edition William C. Boynton California Polytechnic State University at.
The Revenue Cycle: Sales to Cash Collections
The Journal and Source Documents
Sales/Collection Process
Accounting Information Systems and Business Processes - Part I
Presentation transcript:

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 12 Sales/Collection Process

12-2 Outline Learning objectives Value chain Process steps AIS elements

12-3 Learning objectives 1.Explain its role and purpose. 2.List and discuss, in order, the steps in the process. 3.Explain how the generic structure of most AIS applies to the process. 4.Process common transactions. 5.Design & critique internal controls based on common risk exposures. 6.Develop & interpret process- related systems documentation. 7.Relate Porter’s value chain to the process. With respect to the sales / collection process, you should be able to:

12-4 Value chain Organizations exist to create value for their stakeholders. Porter’s value chain is a classic, well recognized model for describing generic value creating activities. It comprises two main parts: –Primary activities –Support activities

12-5 Value chain Primary activities create value directly. –Inbound logistics –Operations –Outbound logistics –Marketing and sales –Service

12-6 Value chain Support activities create value indirectly. –Procurement –Information technology –Human resource management –Infrastructure

12-7 Process steps Overall, the sales / collection process comprises everything from taking a customer’s order through collecting payment from the customer. Details may vary across organizations, but the sales / collection process generally comprises seven generic steps.

12-8 Process steps 1.Take the customer’s order. 2.Approve the customer’s credit. 3.Fill the order based on approved credit. 4.Ship the product. 5.Bill the customer. 6.Collect payment. 7.Process uncollectible receivables as needed.

12-9 AIS elements Inputs Processes Outputs Storage Internal controls Recall from your study in Chapter 1 that most accounting information systems comprise five generic elements. The next series of slides will show how those elements are applied in the context of the sales / collection process.

12-10 AIS elements Customer order Picking list Packing list Bill of lading Customer invoice Customer check Remittance advice Deposit slip Input and output documents associated with the sales / collection process include those listed on the right.

12-11 AIS elements Processes –Seven generic steps –Accounting cycle steps, including the following journal entries: Sale on credit / for cash Payment of outgoing freight charges Cash collections Bad debt write-offs as needed

12-12 AIS elements Master files –Customer –Inventory –Employee –Cash Transaction files –Sales –Cash receipts Junction files –Sales / inventory –Sales / cash receipts Storage Three broad file types Master files Transaction files Junction files Examples for the sales / collection process are listed on the right.

12-13 AIS elements Internal controls –Segregation of duties –Adequate documentation –Insurance –Proper inventory storage –Employee training –Daily cash deposits –Serially-numbered documents –Document matching –Information technology –And a host of others!

12-14