Auditing: Cash receipts procedure

The implementation of the new cash receipts procedure is to improve the efficiency and effectiveness involved with recording customer payments and eliminating risks involving fraudulence in the organization. Although this effective new system highlights many opportunities, the emphasis on internal controls still plays an important role for the Optimo Phone Company. This short essay will highlight potential problems in the internal control structure that may occur due to the establishment of the new system.

The destruction of the remittance advice is a concerning issue involving the internal control structure. A remittance advice provides physical evidence indicating the customer details and amounts paid for, this justifies the importance that all remittance advices should be filed and stored. Should the system break down the remittance advice could be referred to as a verification that the payment has been made. To solv...