Question

Coast Foodservice is a wholesale food distributor located on the Central Coast.

It sells a variety of meat, frozen foods and grocery to foodservice organizations from Salinas to Camarillo. It is a privately owned corporation with a 30,000 square facility. It has 50 employees and virtually operates 24 hours a day, 6 days per week. The company generates approximately $20 million in annual sales and most sales are on credit.

Coast Foodservice uses an old legacy database accounting software and is considering an upgrade to a customized ERP computer system designed by a local software company. The Company has hired your auditing firm to assess its operations and recommend improvements to its internal controls to reduce risk and improve the accounting system.

Sales Order Processing

Coast Foodservice’s salespeople telephone and bring handwritten orders to the office, which prepares an invoice.The Sales Manager approves the customer’s credit. If a salesperson has a special delivery order for a customer, they pick the goods from the warehouse and deliver the order themselves to avoid the burdensome time for warehouse personnel to assemble the order. A copy of the invoice serves as a shipping notice and picking slip for the warehouse. The shipping department (part of warehouse operations) removes inventory from the warehouse and prepares the shipment. When the order is complete, the goods are shipped and inventory is updated by the warehouse staff. The office clerk records the sale in the general journal and the account receivable subsidiary ledger.

Cash Receipts

The receptionist opens the mail and lists all payments. The receptionist also handles all customer complaints and prepares sales return forms for defective merchandise. The accounts receivable clerk records all cash receipts in the general journal and makes the appropriate entry in the accounts receivable subsidiary ledger. The accounts receivable clerk prepares the daily bank deposit. The Controller makes the bank deposit and later reconciles the bank statement on a monthly basis.

Required

1. Create data flow diagrams of the current system – separate diagrams for each processes

Thank you please help

Answer 1

The flow diagram of the current system-seperatly:

Control Environment

Integrity and Ethical Values

Commitment to Competence

Board of Directors and Audit Committee

Management’s Philosophy and Operating Style

Organizational Structure

Assignment of Authority and Responsibility

Human Resource Policies and Procedures

Risk Assessment

Company-wide Objectives

Process-level Objectives

Risk Identification and Analysis

Managing Change

Control Activities

Policies and Procedures

Security (Application and Network)

Application Change Management

Business Continuity/Backups

Outsourcing

Information and Communication

Quality of Information

Effectiveness of Communication

Monitoring

Ongoing Monitoring

Separate Evaluations

Reporting Deficiencies

hope, my answer will help you.