BILTRITE BICYCLES INC. CASE STUDY 2

MODULE II

1. Biltrite’s strengths and weaknesses in the internal control Assertion

Sale Processing Flowchart:

Weakness A. The office was uninformed about the credit approval - Valuation B. Missing customer information and product validation - Valuation C. Invoices were mailed before shipping the goods - Existence
And does not matched with bill of lading D. Bill of ladings are not pre numbered - Completeness

Strength Good internal control for receivables aging analysis and Follow up of delinquent accounts.

Cash Receipts Processing Flowchart:

Weakness

E. Unrestricted customer check endorsement - Valuation F. Unable to edit and apply discounts and correct net amount - Valuation

Purchases and Accounts Payable:

Weakness G. Need approval for the prepared voucher for proper -Valuation
Account distribution

Strengths H. Verifies details on goods received with the receiving report I. Matching control tape with purchase summary for the processed invoices

Payment Processing Flowchart:

Strengths J. Matching the checks with the documents, amount and remittance details K. Checks are reviewed before signing for approval. L. Cancelled checks/documents to avoid duplication. M. Mailed check directly to vendors after signing the checks.

Biltrite’s strengths and weaknesses in the internal control Assertion

Payroll Processing Flowchart:

Weakness N. Supervisor approves employee’s time cards weekly -Occurrence

Strengths O. Payroll department reconciles time cards total hours paid with payroll summary report. P. Good control in input editing for validity of employees information and worked hours. Q. Treasurer reviews checks with payroll summary report before signing and distributing checks.

Other Accounting