Some common fraud indicators in Sales to Receivable systems
- Phony customers including shell companies
- Fictitious invoices
- unauthorised mode of customer payments
- Post dated and back dated customer invoices and payments and returns and refund memos
- Full or semi-manual interventions on sales order processing and payment procedures where the company has invested in innovative end-to-end automation systems
- Single sourced customer and out of line product sales prices over invoice of legitimate customers with refunds made to a differed customer account
- Shell company billing
- Customers with unusual account balances including credit balances
- Unusual sales amounts and products
- Unusual cash receipts
- Unusual sales payment outstanding /prolonged accounts receivables
- Unusual write offs including authorized and unauthorised write offs.
- Out of sequence invoices, sales orders and delivery shipping documents
- Unbilled shipments
- Accounts receivables aging –
- Customers with large account balances – aged
- Customers with no credit limits set and those with credit limits exceeded
- Unusual credit memos
- Unusual Discounts taken by customers
- Unrecorded sales returns and refunds
- Unauthorised and unusual write offs and Improper valuation of account receivables
- Account receivables with no associated sales or sales returns made or unrecorded sales returns
- Unreconciled and uncleared suspense accounts
The blog touched relevant knowledge elements but it is too long. Concise blogs pass messages quicker.
Dear Edu,
Thank you for your comments and the improvement needs suggested.
I totally agree with your observations especially when the target is for the experienced internal auditors who may need a quick refresher on the subject.
My thoughts for the long length are to provide reasonable total picture overview and guidance on the subject as a mentorship to the young and less experienced internal auditors and those aspiring to be in the space, and who will need more detailed insight to grasp the concepts, principles and the application in real life. Once again, thank you for investing your time and effort to read my post.