Question

A serious exposure in the revenue cycle is loes of assets What is the related threat and applicable control procedure that address this exposure?

a. shipping errors, reconciliation of sales onder with picking ticket and packing sp
b. theft of cash, segregation of duties and minimization of cash handling
c. making sales that turn out to be uncollectible force sales people to make collection calls on customers with past due balances
d. poor performance preparation and review of performance reports

Answer 1

The related threat is theft of cash and an applicable control procedure is segregation of duties and minimization of cash handling.

Step-by-step explanation:

The threat related to the loss of assets in the revenue cycle is theft of cash. To address this exposure, an applicable control procedure is segregation of duties and minimization of cash handling. This means that different employees should be responsible for different parts of the cash handling process and that the amount of cash being handled should be reduced as much as possible.

Another threat mentioned in the answer options is shipping errors. The applicable control procedure to address this exposure is reconciliation of sales order with picking ticket and packing slip. This involves comparing the sales order with the picking ticket and packing slip to ensure accuracy.

Overall, the correct answer is option b. Theft of cash can be mitigated through segregation of duties and minimization of cash handling, while shipping errors can be addressed through reconciliation of sales order with picking ticket and packing slip.