Sarbanes Oxley Implementation Plan Level Process

Document Sample
Sarbanes Oxley Implementation Plan Level Process Powered By Docstoc
					                 CO. Corporation – Plant Level Process Narratives
Plant Name: Veracruz Plant
Hyperion Code: HK
Transaction Cycle:      Revenue Cycle
Significant Processes:  Sales and Accounts Receivable (SAR)
                        Estimate Accounts Receivable Reserve (ARR)
                        Cash Receipts (CR)

This narrative should be used in conjunction with the control matrices. Internal cross-
references have been made throughout this narrative, to assist in locating the proper
controls on the appropriate matrix. The following is a key to the cross references:
        SAR Sales and Accounts Receivable Control Matrix
        ARR Estimate Accounts Receivable Reserve Control Matrix
        CR     Cash Receipts Control Matrix

Control Objectives:
Authorization – Only responsible personnel approve customer credit and sales.
Completeness – All sales are timely entered into the accounting records.
Accuracy – Sales are recorded for the correct amount and in the appropriate customer account.
Receipts are recorded for the correct amount and in the appropriate customer account.
Validity – Only sales that actually occur are entered into the accounting records. Invoices are
only entered into the system for valid shipments.
Physical Safeguards and Security – Access to physical assets and information systems are
properly restricted to authorized personnel.
Segregation of Duties – Separate responsibilities for billing, credit & collection, cash receipts,
receivables accounting, and general ledger maintenance are appropriate segregation of duties.
Error Resolution – Discrepancies in the sales, shipment of goods, or receipt of cash are timely
resolved.

I. Sales and Accounts Receivable
         A. Customer Purchase Order
                1. Customer initiates sale by providing signed purchase order or electronic
                      equivalent.
                If it is an existing customer go to step 5; if it is a new customer continue with step
                2:
                2. Customer’s credit is approved.
                3. An authorized individual must set up new customer in the customer master
                file. Application security controls limit access to the customer master file.
                (SAR8)
                4. Location management reviews a report of all changes to the customer and
                pricing master files to ensure that all and only authorized changes were made and
                recorded correctly. (SAR5)
                5. Customer purchase order is reviewed for accuracy (correct release date(s),
                currency, payment terms, customer code, and pricing).
                6. Any discrepancies should be communicated to the applicable sales person
                immediately.
                7. Once all discrepancies (if any) are resolved, the customer purchase order is
                entered into the system.
                      a. Application security controls limit access to the accounts receivable
                          application. (SAR9)
                      b. Application edit checks exist to ensure that all required sales information
                          (defined within the system) is entered into the system. (SAR12)



© Copyright 2010 Docstoc Inc. registered document proprietary, copy not                          1
                 CO. Corporation – Plant Level Process Narratives
Plant Name: Veracruz Plant
Hyperion Code: HK
Transaction Cycle:      Revenue Cycle
Significant Processes:  Sales and Accounts Receivable (SAR)
                        Estimate Accounts Receivable Reserve (ARR)
                        Cash Receipts (CR)


         B. Shipping
         Sales/shipments made without an ASN are performed using the same processes as
         documented below, but with different types of shipping documents.
                 1. Based on the terms of the purchase order, the customer sends the plant their
                     daily manufacturing needs electronically.
                 2. Based on the terms of the customer purchase order, the product is prepared
                     for shipment and the system generates an Advanced Shipping Notice (ASN)
                     or its equivalent.
                     a. Shipping documents (ASNs) are sequentially numbered, used in
                          sequence, and accounted for each period. (SAR10)
                     b. Application edit checks exist to ensure that all required shipment
                          information (defined within the system) is entered into the system.
                          (SAR13)
                 3. Shipments are recorded in the shipping log when shipped.
                 4. The shipping agent (common carrier) signs the shipping documents. A
                     signed copy is maintained in the shipping files.
                 5. The shipping department forwards the ASN to the accounting department for
                     entry into the accounting records.
         C. Accounts Receivable and Sales
                 1. The accounting department reviews the ASNs for sequential numbering and
                     duplicate ASN numbers and any discrepancies are immediately resolved with
                     shipping.
                 2. The ASNs are entered into the accounts receivable application.
                     a. Application security controls limit access to the accounts receivable
                          application. (SAR9)
                     b. Application edit checks exist to ensure that all required receivables
                          information is entered into the system. (SAR14)
                           Once the ASNs are in the accounts receivable system, an invoice is
                          automatically generated. Invoices are created based on an Advance
                          Shipping Document (ASN) or equivalent. (SAR3)
                 3. Amounts invoiced are compared to amounts shipped to ensure accuracy.
                 4. For each sale, the system will automatically post the proper amount to the
                     general ledger as a debit to accounts receivable and a credit to sales. The
                     sales and accounts receivable application has an appropriate level of
                     application controls including edit checks, range tests and reasonableness
                     checks. (SAR11)
                 5. Plant locations run a batch
				
DOCUMENT INFO
Description: Basic for a Sarbanes Oxley Implementation, is the complete procedure to be applied at any size business in the finance and administration area
This document is also part of a package Accounting for SMBs 11 Documents Included