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Risk and Exposures in Revenue Cycle

Risks/Threats/Weakness of IC Exposures/Impact to the company Recommended Internal

Controls
1) Credit sales made to - Muncul resiko kerugian yang -Melakukan analisa
customers who represent poor disebabkan oleh ketidakmampuan (gagal kemapuan kepada
credit risks bayar) dari costumers atas kewajiban customers
pembayaran uatangnya baik utang - Rekomendasi kepada
pokok maupun bunganya ataupun tim analis untuk tidak
keduanya. memberikan kredit
kepada konsumen yang
-Menggangu Cash Flow perusahaan. memiliki riwayat
pembayaran yang buruk

2) Unrecorded or
unbilled - Hilang nya barang dagang karena tidak
shipments ada pencatatan yang cukuk jelas untuk
mendeskripsikan barang dagang,
kuantitas yang dikirimkan, dan data yang
sebenarnya sesuai keadaan barang
tersebut lainnya
- Kesulitan dalam proses penagihan
terhadap pelanggan/konsumen di
karenakan tidak ada catatan tersebut,
dimana catatan tersebut sebagai
informasi kepada pelanggan mengenai
jumlah yang akan ditagih atas barang
yang dibelinya, penagihan pelanggan
harus dilakukan dengan benar dan tepat
waktu
3) Errors in preparing sales
invoices
4) Misplacement of orders from
customers or unfilled backorders
5) Incorrect posting of sales to
accounts receivable records
6) Posting of revenues to wrong
accounting periods, such as
premature booking of revenues
7) Fictitious credit sales to
nonexistent customers
8) Excessive sales returns and
allowances with certain of the
credit memos being for fictitious
returns
9) Theft or misplacement of
finished goods in the warehouse
or on the shipping dock
10) Fraudulent write-offs of
customers’ accounts by
unauthorized persons
11) Theft (skimming) of cash
receipts, especially currency, by
persons involved in the
processing; often accompanied
by omitted postings to affected
customers’ accounts
12) Lapping of payments from
customers when amounts are
posted to accounts receivable
records
13) Accessing of accounts
receivable, merchandise
inventory, and other records by
unauthorized persons
14) Involvement of cash,
merchandise inventory, and
accounts receivable records in
natural or human-made
disasters
15) Planting of virus by
disgruntled employee to destroy
data on magnetic media
16) Interception of data
transmittal between customers
and the web site
17) Unauthorized viewing and
alteration of other customer
account data via the Web
18) Denial by a customer that an
online order was placed after
the transaction is processed
19) Use of stolen credit cards to
place orders via the Web
20) Breakdown of the web
server due to unexpectedly high
volume of transactions

Risk Exposures in Expenditure Cycle

Risks/Threats/Weakness of IC Exposures/Impact to the company Recommende

d Internal Con
1) Orders placed for unneeded
goods or more goods than needed
Receipt of uncoded goods
3) No receipt of ordered goods
4) Fraudulent placement of orders
by buyers with suppliers to whom
they have personal or financial
attachments
5) Creation of fictitious invoices and
other purchasing documents
6) Lack of vigilance in writing down
inventory that is aged or damaged
7) Omission of liabilities, such as
material contingencies
8) Overcharges (with respect either
to unit prices or to quantities) by
suppliers for goods delivered
9) Damage to goods enroute to the
acquiring firm
10) Errors by suppliers in computing
amounts or invoices
11) Erroneous or omitted postings
of purchases or purchase returns to
supplier’s accounts payable records
13) Lost purchase discounts due to
late payments
14) Duplicate payments of invoices
from suppliers
15) Incorrect disbursements of cash,
either to improper or fictitious
parties or for greater amounts than
approved
16) Improper disbursement of cash
for goods or services not received
17) Theft of scrap proceeds
18) Disbursement of checks payable
to employees for unauthorized
expenses or fraudulent claims
19) Fraudulent alteration and
cashing of checks by employees
20) Kiting of checks by employees

21) Accessing of supplier records by

unauthorized persons
22) Involvement of cash,
merchandise inventory, and
accounts payable record in natural
or human-made disasters
23) Interception of data transmitted
via the Web
24) Unauthorized purchase
requisitions and purchase orders
initiated via the Web
25) Unauthorized viewing and
alteration of a company’s purchase
records via the Web
26) Breakdown of the Web server
due to unexpected events

Risk Exposures in Conversion Cycle

Risks/Threats/Weakness of IC Exposures/Impact to the company Recommende

d Internal
Controls
1) Incorrect costs charged to WIP
Inventory
2) Errors in recording quantities of
WIP or Finished Goods Inventory
3) Release of wrong production
order into production
4) Unauthorized release of
production order into production
5) Issuance of excessive or
insufficient quantities of materials
into production
6) Fraudulent charging of labor
hours to production
7) Fraudulent charging of excessive
overtime for production employees
8) Theft of inventories or scrap
9) Excessive delays of orders
between production operations
10) Falsification of finished-goods
inventory records
11) Improper use of cost-flow
methods with respect to
inventories
12) Inflation of inventory values
due to not writing down items
13) Undue delays in detecting
items of products that have
become defective during
production operations
14) Involvement of inventories,
 production facilities, and ledger
records in natural or human-made
disasters
15) Interception of data
transmitted via the web
16) Denying that an online order
was placed after the production
order is processed
17) Unauthorized purchase of
materials initiated via the web
18) Breakdown of the Web server

Risk Exposures in HRM and Payroll Cycle

Risks/Threats/Weakness of IC Exposures/Impact to the company Recommended

Internal
Controls
1) Employment of unqualified
persons
2) Employment of larcenous persons

3) Errors or omissions in time

records, including overtime abuse
4) Errors in payments to employees

5) Incorrect disbursements of
paychecks to fictitious or terminated
employees, or diversions of valid
paychecks to unentitled employees
6) Errors in charging labor expenses
or in stating payroll liabilities
7) Violation of government
regulations and laws, with regard to
payments or reporting requirements
8) Interception of data transmitted
via the web
9) Unauthorized viewing and
alteration of human resource data
via the web
10) Breakdown of the Web server