Manual operations and controls that might have been applied to this invoice are:
1. A proper system for the preparation of invoices:
– Independent preparation – invoices should have been prepared and sales journals entered up (or invoices summarized, where journals were not kept) by a section separate from the sales ledger sections. This section should also have been separate from the dispatch of goods and cash collection.
– Sales prices of goods should be authorized in writing. A responsible official, who should have been independent of the accounts department, should authorize discount and special terms.
i. Controls to ensure that all invoices and credit notes are entered in the books.
– Pre numbering invoices – invoices and credit notes should have been pre-numbered and filed, after entry in the books in numerical order.
– The processed invoice should have been received and any missing numbers investigated. A responsible official independent of the sales ledger & cash receipts personnel should have authorized any spoilt, cancelled or altered invoice.
ii. A control to ensure that all authorized transactions are recorded in the sales ledger.
– Authorized invoices should be pre-listed determining a total for posting to an independent control account, before the ledger personnel process them. The totals of the ledger posting runs (both nominal and personal account) should have been agreed back to the control account