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Risk Register for Revenue and Accounts Receivable Process

Process: Revenue and AR

S. No Risk description Source / File Name Risk rating

A. Policies and Procedures Policies and procedures for revenue


Written policies and procedures for revenue and are evolved over time and are
receivables may not be available and followed standardised. Documentation under
1 by the company. process.
All employees are trained on policies
Employees may not be aware of policies and procedures before being put on
2 governing revenue and receivables job.
A proper segregation of duties including
initiating and recording transactions and
maintaining custody of assets are in place. Segregation of duties exists. Invoice
(Invoicing, collection, customer adjustments and is raised by billing clerk / assistant
accounting entries are not handled by the same and cash is collected by
3 person) cashier/Pharmacist

Manual Bills have to be feeded within


2 days. Surprise stock audit are
4 Manual Bills may not be feeded in the system conducted to mitigate this problem.
Sales Return may not be for the original sales For every sales return original invoice
5 made. bill has to be attached.
B. Maintenance of Standing Data
All sale prices are on MRP and data
entry operators cannot change the
6 Service price may not be determined properly prices.
All products are on MRP and if option
Traiffs may not be approved by the appropriate is available then it is done only on
7 authority proper authorisation.
Employees raising invoices may not be aware of
8 appropriate tariffs Not Applicable
MRP rates are fed for all products at
time of the product being fed in the
Revised tariffs may not be updated inventory and checked by Branch
9 appropriately in the tariff master incharge or by stores incharge.
Customer / patient data may not be properly
maintained and operated (Details such as name,
10 address, nature of services rendered) Not Applicable
C. Credit control
Most of the sales are on cash basis
Written policies on credit controls may not be and credit sales are made on
11 available authorisation from proper authority.

Very few parties are on credit basis.


Although written aggrements are
there for most of the parties. Other
Payment terms and conditions are not properly credit transactions due to their value
communicated and agreed to for all customers / being not material are done on oral
12 patients instructions.
Monthly debtors outstanding are sent
Adequate credit monitoring may not be done by to Chief Operating Officer of
13 a designated person in Senior Management pharmacy & to the branch incharges.
D. Revenue Processing
Invoices are not raised according to the
standard tariffs i.e sales amounts are not
completely and accurately calculated ;
Discounts / adjustments are not appropriately Bills raised are checked by one more
14 authorised person before giving to the customer.
Goods if they are not through invoice
then there will be shortage in
Invoices are not raised for all customers / inventory which is charged equally to
15 patients servcied during the month all branch staff.
There will be shortage of goods if
invoices are not raised. Goods are
100% verified by auditors once in a
year. Surprise checks are made by
Invoices are not raised in the correct accounting auditors either monthly or on
16 period quaterly basis
17 Invoives may not be promptly issued Same as above.
Spurious invoices are raised in the system by
18 unauthorised individuals Same as above.
All invoices raised are not appropriately verified Bills raised are checked by one more
19 and approved person before giving to the customer.

Adjustments cannot be made


Adjustments to invoicing such as issuance of manually, bill have to cancelled and
credit notes, price modifications, discounts etc new bills have to be issued. Branches
are not made in accordance with required do not have access to change the
20 documents / with appropriate authorisations value of goods sold. High

Approved adjustments are not input for


21 processing completely and accurately
Adjustments are not made to the correct
22 account or in the correct accounting period Not applicable
Modifications to invoices are not immediately
23 notified to the patient / customer Not applicable
All significant sales adjustments are not
independently verified for comleteness,
24 accuracy and validity Not applicable

Discounts are given after the


approval of the COO - Pharmacy or Sr
Manger of Pharmacy. Every month
Management's approval may not be obtained for discount statement from the software
25 discounts/ allowances is taken and verified.
Invoices are not sequentially numbered ; Any Invoice numbers are sequentially
26 gaps in invoices are promptly investigated generated by system.
27 Duplicate invoicing may occur The software ensures that.
There will be shortage of goods if
invoices are not raised. Goods are
100% verified by auditors once in a
year. Surprise checks are made by
Items used for patient treatment may be auditors either monthly or on
28 erroneously left out in billing quaterly basis
Accounting
Revenue as reported by accounts
Revenue amounts are not accurately posted in department is checked with inventory
29 General Ledger software report for each branch.

Appropriate segregation of duties does not exist


(person preparing the invoices should not be
30 given rights to post enries) Not applicable
Receivables dominated in Foreign currency are
not translated into local functional currency in They are done as per Accounting
31 accordance with company's accounting policy. Standard and checked by Auditors.

Allowance in accordance with bad


Allowance for doubtful accounts may not be debts policy formulated by audit
32 adequate committee.
Adequacy of allowance for doubtful accounts not
reviewed by an appropriate level in
33 management Reviewed by audit committee.
Provisions for services rendered but not billed
34 are not made accurately Not Applicable
Cash Receipts and Debtors Management
Monthly debtors statement are sent
Receipts are not entered in the correct to operations department for
35 customer account confirmation
Customers with past due invoices are not
36 notified promptly There is a system of follow up.

Monthly debtors statement are sent


to operations department for
confirmation The operations
The responsibility, timing and actions to be departments makes the follow up for
taken on overdue customer accounts may not small debtors. Corporate Debtors are
37 be well defined followed by both the departments.
All inputs are checked for correctness
Debtors statement generated from the system and accuracy by the audit
38 may not be accurate department.

Debtors statement generated from the system All inputs are checked for correctness
may not be reviewed for completeness and and accuracy by the audit
39 correctness department.

Debtors account balances are not updated There is automatic updation of data
40 accurately and completely on receipt on correct entry of receipt.

Will be discovered on tallying of cash


41 Fictitious receipt entries are input and BRS statements.

Appropriate access controls may not be in place


for making input entries into debtor accounts
(This is to avoid the possibility of making There are no appropriate access
42 fictitious receipt entries) controls.

All receipts from debtors are not correctly Matching is checked by audit
43 matched against outstanding invoices department

No payment entry is fed in the


computer without details from the
Unapplied receipts are not promptly operations stating the bills for which
44 investigated and resolved they are received.
Accounts receivable confirmations are not
mailed periodically to all customers and any
disputes/queries are not investigated on a Confirmations are sent to all parties
45 timely basis. every half year.
Appropriate segregation of duties not in place
(for e.g persons raising invoices and persons
incharge of collecting receipts should be
46 independent) Not applicable

All open invoices are not reviewed periodically ;


Detailed accounts receivables ageing by Monthly review of debtors carried out
customer is not reviewed monthly ; unusual internally by the management.
47 balances are not investigated Quarterly done by audit committee.