Reference no: EM132785781

Nice Flowers is a flower wholesale. Customers telephone the company and their orders are taken by clerks who take details of the flowers to be delivered, the address to which they are to be delivered, and account details of the customer. The clerks input these details into the company's computer system (once the order is being taken) which is integrated with the company's inventory control system. The company's standard credit terms are payment one month from the order (all orders are dispatched within 48 hours) and most customers pay by bank transfer. An accounts receivable ledger is maintained, and statements are sent to customers once a month. Credit limits are set by the credit controller according to a standard formula and are automatically applied by the computer system, as are the prices of flowers.

Problem 1: Describe and explain the purpose of the internal controls you might expect to see in the sales system at Nice Flowers over the Receipt, processing and recording of orders and Collection of cash.