The objective of an internal audit is to assess the risk of material misstatement in financial reporting. Material misstatements can arise from inadequacies in internal controls and from inaccurate management assertions. As such, testing the validity of various implicit managerial assertions is a key objective as an internal auditor. Show While this applies to all financial cycles, its important not to overlook other business functions that must be audited, like the Sales Invoicing and Credit Management (SICM) cycle. One of internal audits main roles in auditing sales invoicing and credit management is to ensure proper segregation of duties whenever possible and assign appropriate mitigation controls where proper separation is not possible. The Most Important General Control Activities for Sales Invoicing and Credit Management Are:
Sales and Marketing OrganizationWhen conducting sales and marketing activities, there are a few important business goals that should be considered:
When conducting the audit ofyour sales and marketing organizationlook out for the following controls/best practices:
Segregation of DutiesBusinesses should be aware of employee responsibilities to ensure adequateSegregation of Duties (SOD)whenever possible. The risk of not doing so includes inadvertently processing unauthorized transactions. When conducting the audit look out for the following controls/best practices:
IT/ERP Systems and ApplicationsIT infrastructure and applications must adequately support the activities of the business. A poor infrastructure results in a variety of inefficiencies and poor decisions, plus a plethora of security risks and legal risks. When conducting the audit look out for the following controls/best practices:
Sales and Marketing StrategySales and Marketing Strategysupports the business goals and objectives. When conducting the audit look out for the following controls/best practices:
Policies and ProceduresClear policies and procedures should be documented for key aspects of the cycle. Not having clearpolicies and procedureswill lead to insufficient guidance for sales and marketing staff and controls will not be executed as designed. When conducting the audit look out for the following controls/best practices:
In conclusion, auditing standards require that auditors test basic underlying management assertions implicit in the financial statements. Key objectives to these assertions are; Existence and Completeness, Rights and Obligations, Valuation or Allocation, and Presentation and Disclosure. While this article provides a brief overview, we have a library of audit checklists, RCMs, and other useful audit tools, so please feel free to contact us should you have questions or if you would like additional information. We are happy to provide you with whatever you need. Related |