Accounting is not only recording, paying invoice, raising invoice, receiving money, and preparing financial reports. Accounting system should include internal controls to ensure the financial assertions and reliability of financial reporting. Therefore, we would like to explain the major controls over revenue and accounts receivables as follow.
Committee of Sponsoring Organizations of the Treadway Commission (COSO) developed the integrated framework control that consists five interrelated and equally important components:
1) Control environment
2) Risk assessment
3) Control activities
4) Information & communication
For more detailed explanation of those five components for accounts receivables and revenue, please see below: