Control Weaknesses and Strengths According to Flowchart Results

Control Weaknesses According to Flowchart Results:

1.      Control environment: Shipping only has a small database that they use to keep track of the good received and removed. They also only need to use the terms stock release and stock records which is very vague and should be more detailed so they know exactly what is going in and out.

2.      Risk assessment: They ship most goods to customers assuming that the credit will be approved since it usually is. If the customer is not approved then they take the risk of wasting time, effort and money to ship it to the customer and sending it back if the customer can’t pay for it. They have the sales department in charge of the credit authorization process which can create a conflict of interest since they work on commission.

3.      Control activities: Anyone can process the order if the sales representative is unavailable. This can cause a delay if they are unfamiliar with the customer’s credit to start processing the order. This can also cause a double order to take place if both the sales representative and someone else are both working on it at the same time. They also could send partially picked orders over to shipping which could cause the order to get lost or misplaced when they have the other available items to add to it later.

4.      Information and communications: There are some miscommunications between the warehouse and shipping department due to over and under shipment of products. This is a simple thing that can be fixed so that over and under shipments of products don't occur again.

5.      Monitoring: There is a delay in the time that it takes the accounting department to send requested information on the needed accounting records and many of the records contain more or less of the same information.

Control Strengths According to Flowchart Results:

1.      Control environment: They have their customer files via EDI, since everything is electronic they will not have a problem of tracking down an order if they hardcopy was lost. This is also more convenient since they can look up which process they are at through the use of technology.

2.      Risk assessment: They have a stringent credit process in place to check for the credits of buyers so that it will minimize the risk of processing the order for customers who will not be able to pay for the items.

3.      Control activities: There are different individuals who experienced in the different processing steps. This allows each person to focus on what they are trained and know how to do best. This also creates more organization so that when there are errors during the process they know which department and who to look for.

4.      Information and communications: Each person that is involved with the processing step is aware of what they are supposed to do. If something is uncertain they can ask the people who are most experienced to get the answers that they need. They update the information in inventory when goods and stock release are picked up so they will know how much they have.

5.      Monitoring: Copies of sales help the business monitor the process of the order from placing it to shipping. They compare sales order to the shipping information to make sure that it matches. To minimize errors the shipping clerk examines the goods and stock release, prepares bill of lading and packing slip and creates shipping notice and files it.