Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions
|
|
- Asher Hancock
- 7 years ago
- Views:
Transcription
1 Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions Chapter Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-1
2 Learning Objective 1 Identify the accounts and the classes of transactions in the sales and collection cycle Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-2
3 Accounts in the Sales and Collection Cycle Sales Cash sales Sales on account Accounts Receivable Beginning balance Cash receipts Cash in Bank Cash Discounts Taken Sales on account Sales returns and allowances Sales Returns and Allowances Ending balance Write-off of uncollectible accounts Bad Debt Expense 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-3
4 Accounts in the Sales and Collection Cycle Accounts Receivable Beginning balance Sales on account Ending balance Cash receipts Sales returns and allowances Write-off of uncollectible accounts Bad Debt Expense Allowance for Uncollectible Accounts Write-off of uncollectible accounts Beginning balance Estimate of bad debt expense Ending balance 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-4
5 Learning Objective 2 Describe the business functions and the related documents and records in the sales and collection cycle Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-5
6 Sales Transaction Accounts Sales Accounts receivable Business Functions Processing customer orders Granting credit Shipping goods Billing customers and recording sales Documents and Records Customer order Sales order Customer order or sales order Shipping document Sales invoice Sales transaction file Sales journal or listing Accounts receivable master file Accounts receivable trial balance Monthly statements 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-6
7 Cash Receipts Transaction Accounts Cash in bank (debits from cash receipts) Accounts receivable Business Functions Documents and Records Processing and recording cash receipts Remittance advice Prelisting of cash receipts Cash receipts transaction file Cash receipts journal or listing 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-7
8 Sales Returns and Allowances Transaction Accounts Business Functions Documents and Records Sales returns and allowances Accounts receivable Processing and recording sales returns and allowances Credit memo Sales and returns and allowances journal 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-8
9 Write-off of Uncollectible Accounts Transaction Accounts Business Functions Documents and Records Accounts receivable Allowance for uncollectible accounts Writing off uncollectible accounts receivable Uncollectible account authorization from general journal 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-9
10 Bad Debt Expense Transaction Accounts Business Functions Documents and Records Bad debt expense Allowance for uncollectible accounts Providing for bad debts General journal 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-10
11 Processing Customer Orders Customer Order: A request for merchandise by a customer Sales Order: A document describing the goods ordered by a customer 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-11
12 Granting Credit Before goods are shipped, a properly authorized person must approve credit to the customer for sales on account 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-12
13 Shipping Goods This is the first point in the cycle where company assets are given up 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-13
14 Billing Customers and Recording Sales Sales invoice Sales transaction file Sales journal or listing Accounts receivable master file Accounts receivable trial balance Monthly statement 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-14
15 Processing and Recording Cash Receipts Remittance advice Prelisting of cash receipts Cash receipts transaction file Cash receipts journal or listing 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-15
16 Processing and Recording Sales Returns and Allowances Credit memo Sales returns and allowances journal 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-16
17 Writing Off Uncollectible Accounts Receivable Uncollectible account authorization form This is a document used internally to indicate authority to write an account receivable off as uncollectible 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-17
18 Providing for Bad Debts This provision represents a residual, resulting from management s end-of-period adjustment of the allowance for uncollectible accounts 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-18
19 Learning Objective 3 Understand internal control, and design and perform tests of controls and substantive tests of transactions for sales Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-19
20 Methodology for Designing Controls and Substantive Tests Understand internal control sales Assess planned control risk sales Determine extent of testing controls Design tests of controls and substantive tests of transactions for sales to meet transactionrelated audit objectives Audit procedures Sample size Items to select Timing 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-20
21 Understand Internal Control Sales Study the client s flowcharts, prepare an internal control questionnaire, and perform walk-through tests of sales Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-21
22 Assess Planned Control Risk Sales 1. Framework for assessing control risk 2. Identify key internal controls and deficiencies 3. Associate controls and deficiencies with the objectives 4. Assess control risk for each objective 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-22
23 Assess Planned Control Risk Sales Adequate separation of duties Proper authorization Adequate documents and records Prenumbered documents Monthly statements Internal verification procedures 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-23
24 Determine Extent of Testing Controls Audits of public companies Audits of nonpublic companies 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-24
25 Transaction-related Audit Objectives for Sales Occurrence: Recorded sales are for shipments actually made. Completeness: Existing sales transactions are recorded. Accuracy: Recorded sales are for the amount shipped Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-25
26 Transaction-related Audit Objectives for Sales Posting and summarization: Sales transactions are correctly included in the accounts receivable master file. Classification: Sales transactions are correctly classified. Timing: Sales are recorded on the correct dates Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-26
27 Direction of Tests for Sales Customer order Shipping document Duplicate sales invoice Sales journal General journal = Accounts receivable master file Completeness start Existence start 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-27
28 Summary of Methodology for Sales Transaction-related audit objectives (Column 1) Key existing controls (Column 2) Tests of control (Column 3) Deficiencies (Column 4) Substantive tests of transactions (Column 5) 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-28
29 Learning Objective 4 Apply the methodology for controls over sales transactions to controls over sales returns and allowances Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-29
30 Sales Returns and Allowances The transaction-related audit objectives and client s methods of controlling misstatements are essentially the same for processing credit memos as those described for sales Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-30
31 Sales Returns and Allowances There are, however, two important differences. Materiality Emphasis on objectives 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-31
32 Learning Objective 5 Understand internal control, and design and perform tests of controls and substantive tests of transactions for cash receipts Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-32
33 Tests of Controls and Substantive Tests of Transactions for Cash Receipts Determine whether cash received was recorded Prepare proof of cash receipts Test to discover lapping of accounts receivable 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-33
34 Learning Objective 6 Apply the methodology for controls over the sales and collection cycle to write-offs of uncollectible accounts receivable Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-34
35 Audit Tests for the Write-Off of Uncollectible Accounts Occurrence transaction-related audit objective Proper authorization of the write-off of uncollectible accounts Verification of accounts written off 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-35
36 Additional Internal Controls Over Account Balances Realizable value Credit approval Aged accounts receivable trial balance Writing off uncollectibles Rights and obligations Presentation and disclosure 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-36
37 Effect of Results of Controls and Substantive Tests of Transactions The parts of the audit most affected by the tests for the sales and collection cycle are: Accounts receivable Cash Bad debt expense Allowance for doubtful accounts 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-37
38 Sales Types of Audit Tests for the Sales and Collection Cycle Accounts Receivable Sales Cash receipts transactions transactions Audited by TOC, STOT, and AP Ending balance Ending balance Audited by AP and TDB Audited by TOC, STOT, and AP TOC + STOT + AP + TDB = Sufficient appropriate evidence Cash in Bank 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-38
39 End of Chapter Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 14-39
Chapter 14 Audit of the Sales and Collection Cycle:
Chapter 14 Audit of the Sales and Collection Cycle: Tests of Control and Substantive Tests of Transactions Identify the accounts and the classes of transactions in the sales and collection cycle. Describe
More informationAudit of the Payroll and Personnel Cycle
Audit of the Payroll and Personnel Cycle Chapter 18 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 18-1 Learning Objective 1 Identify the accounts and transactions in the payroll
More informationAudit of Cash Balances
Audit of Cash Balances Chapter 23 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 23-1 Learning Objective 1 Show the relationship of cash in the bank to the various transaction
More informationAudit Program for Accounts Receivable and Sales
Form AP 15 Index Reference Audit Program for Accounts Receivable and Sales Legal Company Name Client: Balance Sheet Date: Instructions: The auditor should refer to the audit planning documentation to gain
More informationSCAD V: Parts 2 and 3 - Assessing Control Risk
SCAD V: Parts 2 and 3 - Assessing Control Risk I. Part 3: Understand Client s Internal Control System (IC pages 1 and 2) A. Gather Information 1. Flowcharts 2. Documents/walkthrough 3. Identify controls
More informationAudit of the Inventory and Warehousing Cycle
Audit of the Inventory and Warehousing Cycle Chapter 21 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 21-1 Learning Objective 1 Describe the business functions and the related
More informationChapter 14 Completing the Tests in the Sales and Collection Cycle: Accounts Receivable
Chapter 14 Completing the Tests in the Sales and Collection Cycle: Accounts Receivable Review Questions 14-1 Tests of details of financial balances are designed to determine the reasonableness of the balances
More information10-1. Auditing Business Process. Objectives Understand the Auditing of the Enteties Business. Process
10-1 Auditing Business Process Auditing Business Process Objectives Understand the Auditing of the Enteties Business Process Identify the types of transactions in different Business Process Asses Control
More informationthree TESTS OF CONTROLS AND TESTS OF DETAILS
TESTS OF CONTROLS AND TESTS OF DETAILS P A R T three Part 3 covers the major evidence-gathering procedures of the assurance services engagements. Chapter 9 covers tests of controls for the control risk
More informationAUDIT PROCEDURES RECEIVABLE AND SALES
184 AUDIT PROCEDURES RECEIVABLE AND SALES Ștefan Zuca Abstract The overall objective of the audit of accounts receivable and sales is to determine if they are fairly presented in the context of the financial
More informationCustomer Credit and Accounts Receivable
Customer Credit and Accounts Receivable Gap Analysis: POS identifies the following Best Practices as efficient and effective control processes for the above risk. Listed for comparison are the controls
More informationChapter 14 Auditing the Revenue Cycle. Ics in sales are designed to achieve these seven objectives:
Chapter 14 Auditing the Revenue Cycle Ics in sales are designed to achieve these seven objectives: 1 recorded transactions are valid 2 transactions are properly authorized 3 existing transactions are recorded
More informationC H A P T E R. Receivables. Financial Accounting 14e. human/istock/360/getty Images. Warren Reeve Duchac
human/istock/360/getty Images C H A P T E R 9 Receivables Financial Accounting 14e Warren Reeve Duchac Classification of Receivables The term receivables includes all money claims against other entities,
More informationChecklist - Monthly Close Process
Checklist - Monthly Close Process Introductuion: This document should be used as a general guide to creating a monthly financial close process checklist, however, it does not address all activities that
More informationWork4Me Accounting Simulations. Problem Eleven
Work4Me Accounting Simulations 3 rd Web-Based Edition Problem Eleven Aging Accounts Receivable Page 1 INTRODUCTION Log on to Work4Me II and from the Problems Menu Bar, select Problem 11, Aging Accounts
More informationInvestments Advance to subsidiary company 81,000
EXERCISE 7-3 (10 15 minutes) Current assets Accounts receivable Customers Accounts (of which accounts in the amount of $40,000 have been pledged as security for a bank loan) $79,000 Installment accounts
More informationAudit Program for Accounts Payable and Purchases
Form AP 50 Index Audit Program for Accounts Payable and Purchases Legal Company Name Client: Balance Sheet Date: Instructions: The auditor should refer to the audit planning documentation to gain an understanding
More informationReceivables QUIZ AND TEST HINTS
C H A P T E R 9 Receivables QUIZ AND TEST HINTS The following hints may be helpful to you in preparing for a quiz or a test over the material covered in Chapter 9. 1. You should be able to prepare journal
More information1. $45000 2. $108000 3. $63000 4. $135000
For the last several years Monte Cristo Corp. has operated with a gross profit rate of 30%. On January 1 of the current year, the company had on hand inventory with a cost of $150,000. Purchases of merchandise
More informationChapter 8. Reporting and Analyzing Receivables
Chapter 8 Reporting and Analyzing Receivables Study Objective 1 - Identify the Different Types of Receivables The term receivables refers to amounts due from individuals and companies. Receivables are
More informationWe now examine the documents and procedures used to perform each step. Step 1: Capture Transaction Data on Source Documents
Journals and Ledgers TRANSACTION PROCESSING: DOCUMENTS AND PROCEDURES IN A MANUAL AIS One basic function of the AIS is the efficient and effective processing of data about a company s transactions. Transaction
More information1/21/2014. Agenda. Audit Testing. The Basics of Internal Auditing January 23-24, 2014
The Basics of Internal Auditing January 23-24, 2014 Kim Mills Director of Auditing Agenda To identify the different types of audit tests and discuss the purpose for each type. IIA Standard 2320 Internal
More informationSubstantive Tests of Transactions and Balances
10 CHAPTER Substantive Tests of Transactions and Balances LEARNING OBJECTIVES After studying this chapter you should be able to: 1 2 identify and distinguish between tests of controls and substantive tests
More informationChapter 15: Accounts Payable and Purchases
Accounting Research Manager - Audit Private Accounting Research Manager Miller Interpretations and Other Resources Knowledge-Based Audit Procedures Chapter 15: Accounts Payable and Purchases Chapter 15:
More informationfinreporting.com free online financial services REVENUE AND RECEIVABLES AUDIT PROGRAM
REVENUE AND RECEIVABLES AUDIT PROGRAM REVENUE & RECEIVABLES ABC Corporation Work papers prepared by: Work papers reviewed by: Audit Program approved by: I. SCOPE/AUDIT OBJECTIVES: A. The overall objective
More informationACCOUNT DEBIT CREDIT Accounts receivable 10,000 Sales 10,000 To record the sale of merchandise to Sophie Company
CURRENT RECEIVABLES Receivables are the amount owed to the organization by its customers and/or others. Current receivables will be collected within one year or the current operating cycle which ever is
More informationMateriality and Risk. Chapter 9. 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 9-1
Materiality and Risk Chapter 9 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 9-1 Learning Objective 1 Apply the concept of materiality to the audit. 2008 Prentice Hall Business
More informationShort-term investments (also known as marketable securities) are easily convertible to cash that a company plans to hold for a year or less.
Accounting Fundamentals Lesson 5 5.0 Receivables & Investments Short-term investments (also known as marketable securities) are easily convertible to cash that a company plans to hold for a year or less.
More informationINTERNAL CONTROL OVER PURCHASE INTERNAL CONTROL OVER INVENTORY INTERNAL CONTROL OVER CASH PAYMENTS INTERNAL CONTROL OVER CASH RECEIPTS
Internal Control over the followings is included in the syllabus: INTERNAL CONTROL OVER SALES INTERNAL CONTROL OVER PURCHASE INTERNAL CONTROL OVER INVENTORY INTERNAL CONTROL OVER CASH PAYMENTS INTERNAL
More information1. Analyze the following T-account in the ledger of Moxy Pool Supply Company
Name: Date: 1. Analyze the following T-account in the ledger of Moxy Pool Supply Company Mdse. Inventory 5,000 400 If $5,000 in the Inventory account represents merchandise purchased from a supplier, we
More informationChapter 07 - Accounts and Notes Receivable. Chapter Outline
Chapter 07 - Accounts and Receivable I. Accounts Receivable A receivable is an amount due from another party. Accounts Receivable are amounts due from customers for credit sales. A. Recognizing Accounts
More informationCash in bank checking account $22,500 U.S. treasury bills 5,000 Cash on hand 1,350 Undeposited customer checks 1,840 Total $30,690 Requirement 2
Chapter 7 Solutions EXERCISES Exercise 7 2 Cash and cash equivalents includes: Cash in bank checking account $22,500 U.S. treasury bills 5,000 Cash on hand 1,350 Undeposited customer checks 1,840 Total
More informationAdjustment for Loss from Uncollectible Accounts (accrued expense)
Adjustment for Loss from Uncollectible Accounts (accrued expense) Objective Explain and illustrate the allowance method of accounting for uncollectible accounts receivable. Cite the advantages and disadvantages
More informationChapter 15 Auditing the Expenditure Cycle
Chapter 15 Auditing the Expenditure Cycle Expenditure cycle consists of activities related to the acquisition of and payment for plant assets and goods and services. Two major transaction classes: 1 purchases
More informationOffice of the State Controller. Self-Assessment of Internal Controls. Purchasing/Accounts Payable Cycle. Objectives and Risks
Office of the State Controller Self-Assessment of Internal Controls Purchasing/Accounts Payable Cycle Objectives and Risks Agency Year-End Objectives All requests for goods and services are initiated and
More informationCHAPTER 8 WHEN REVENUE IS RECOGNIZED RECOGNIZED HOW REVENUE IS REVENUE CYCLE: SALES, RECEIVABLES, AND CASH
CHAPTER 8 REVENUE CYCLE: SALES, RECEIVABLES, AND CASH 1 WHEN REVENUE IS RECOGNIZED Revenue should be recognized when two criteria are met: The promised work has been substantially completed Cash, or a
More informationA/R Journal Entries GAAP. Add Invoice Line. Cancel Line from Invoice Maintenance. Cancel Balance via Write-Off Invoice Balances Routine
CHAPTER 6 A/R Journal Entries This chapter will review the automated journal entries made by the module. The entries are separated into a GAAP and Non-GAAP section. GAAP Add Invoice Line An accrual entry
More informationGeneral Ledger Auditing. Presented By: Jim Lee
General Ledger Auditing Presented By: Jim Lee Table of Contents Overview... 3 Month-End Accounting Binder... 3 Month-End Accounting Checklist... 4 Trial Balance... 5 Journal Entries... 6 Account Reconciliations...
More informationThe Impact of Information Technology on the Audit Process
The Impact of Information Technology on the Audit Process Chapter 12 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 12-1 Learning Objective 1 Describe how IT improves internal
More informationWhat are the end-of-period-adjustments in accounting? Peter Baskerville
What are the end-of-period-adjustments in accounting? Peter Baskerville Explaining the place and reason for end-of-period-adjustments in accounting - Practicing Level End-of-period-adjustments in accounting
More informationwww.cebu-cpar.com CEBU CPAR CENTER, INC. AUDIT OF CASH AND CASH EQUIVALENTS
AUDIT OF CASH AND CASH EQUIVALENTS PROBLEM NO. 1 In connection with your audit of Caloocan Corporation for the year ended December 31, 2006, you gathered the following: 1. Current account at Metrobank
More informationPROFESSOR S NAME ACC 255 FALL 2011 COVER SHEET FOR COMPREHENSIVE PROBLEM 2 (CHAPTERS 2, 5-8)
COMPREHENSIVE PROBLEM 2 (CHAPTERS 2, 5-8) Page 137 NAME ANSWER KEY PROFESSOR S NAME SECTION SCORE ACC 255 FALL 2011 COVER SHEET FOR COMPREHENSIVE PROBLEM 2 (CHAPTERS 2, 5-8) INSTRUCTIONS: COMPLETE ALL
More informationChapter 10 Overall Audit Plan and Audit Program
Chapter 10 Overall Audit Plan and Audit Program Review Questions 10-1 The four types of tests used by auditors to determine whether financial statements are fairly stated are; 1. procedures to obtain an
More informationFinancial Accounting Chapter 9: Receivables
Supplemental Instruction Handouts Financial Accounting Chapter 9: Receivables 1. At December 31, 2011, AZY Co had $1,550,000 in credit sales for the year. The company believes that 5% of these sales will
More informationCommercial and Industrial Lending
Commercial and Industrial Lending A CPA Perspective April 2014 Overview Introductions and Goals of Presentation Commercial and Industrial Lending: Brief Background Covenants, Advance Rates, and Borrowing
More informationExpected Competencies. (The enhanced course must include the following competencies.)
Accounting I (BACCT-TP) 1202210T High School Course College WECM Equivalent Introduction to Accounting I ACNT 1303 or ACNT 1403 (or ACNT 1003 CEU) AND Introduction to Accounting II ACNT 1304 or ACNT 1404
More informationAccounting for Receivables
Introduction to Accounting 2 Modul 2 Accounting for Receivables After studying this chapter, you should be able to: 1. Identify the different types of receivables. 2. Explain how accounts receivable are
More informationAfter a valid PO (EDI 850) is received from Party City, follow these procedures to ensure your invoices are paid on a timely basis:
Accounts Payable Overview Party City (includes Party City Corporate, Party America Corporate, TPF and Party City Franchise Group [PCFG]). Collectively, these groups will be indentified as the Company.
More informationAudit Sampling for Tests of Controls and Substantive Tests of Transactions
Audit Sampling for Tests of Controls and Substantive Tests of Transactions Chapter 15 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 15-1 Learning Objective 1 Explain the concept
More informationGeneric Business Process (1) Expenditure Cycle & Revenue Cycle
Generic Business Process (1) Expenditure Cycle & Revenue Cycle Topik Bahasan Expenditure Cycle Revenue Cycle Sumber Materi Romney / Steinbart, Accounting Information Systems, 9th Edition ch.11-12, Prentice
More informationOverall Audit Plan and Audit Program. I. Introduction Chapter is primarily review and integration of the audit framework.
Overall Audit Plan and Audit Program A424: Chapter 13 I. Introduction Chapter is primarily review and integration of the audit framework. II. Types of Tests used to determine fair presentation of financial
More informationInternal Control Systems
D. INTERNAL CONTROL 1. Internal Control Systems 2. The Use of Internal Control Systems by Auditors 3. Transaction Cycles 4. Tests of Control 5. The Evaluation of Internal Control Component 6. Communication
More informationWEEK 6. Objective 1: Sales Transaction Cycle Risks
WEEK 6 CSA ch4 & GS ch10: pp457-488 Objective 1: Sales Transaction Cycle Risks The major assertions of interest to the auditor in ST of balances for account receivable are existence and valuation and allocation.
More informationJob Ready Assessment Blueprint. Accounting-Basic. Test Code: 4000 / Version: 01. Copyright 2012. All Rights Reserved.
Job Ready Assessment Blueprint Accounting-Basic Test Code: 4000 / Version: 01 Copyright 2012. All Rights Reserved. General Assessment Information Blueprint Contents General Assessment Information Written
More informationA424: Chapter 15 Audit Sampling for Tests of Controls and Substantive Tests of Transactions
Preparation questions: A424: Chapter 15 Audit Sampling for Tests of Controls and Substantive Tests of Transactions 1. A sample is a sample in which the characteristics in the sample are approximately the
More informationJOB READY ASSESSMENT BLUEPRINT ACCOUNTING-BASIC - PILOT. Test Code: 4100 Version: 01
JOB READY ASSESSMENT BLUEPRINT ACCOUNTING-BASIC - PILOT Test Code: 4100 Version: 01 Specific Competencies and Skills Tested in this Assessment: Journalizing Apply the accounting equation to journalize
More informationBUS312A/612A Financial Reporting I. Homework 10.8.2014 Receivables Chapter 7
BUS312A/612A Financial Reporting I Homework 10.8.2014 Receivables Chapter 7 E7-3 (Financial Statement Presentation of Receivables) Jim Carrie Company shows a balance of $181,140 in the Accounts Receivable
More informationChapter 8. Receivables
Chapter 8 Receivables Receivables mean amounts owed to the company by others. Accounts Receivable are receivables resulting from the company rendering services or selling products to the public. The company
More informationChapter 8: account receivable
Chapter 8: account receivable Three accounting issues associated with accounts receivable are: 1. Recognizing accounts receivable 2. Valuing accounts receivable 3. Disposing of accounts receivable Recognizing
More informationChapter 7 Cash and Receivables
Chapter 7 Cash and Receivables QUESTIONS FOR REVIEW OF KEY TOPICS Question 7-1 Cash equivalents usually include negotiable instruments as well as highly liquid investments that have a maturity date no
More informationAccounting information systems and business process : part 1
King Saud University College of Administrative Science Department of Accounting Accounting information systems and business process : part 1 Chapter 4 Prepared By: Eman Al-Aqeel Professor : Dr: Suliman
More informationStages of the Audit Process
Chapter 5 Stages of the Audit Process Learning Objectives Upon completion of this chapter you should be able to explain: LO 1 Explain the audit process. LO 2 Accept a new client or confirming the continuance
More informationChapter 8 Accounting for Receivables 高立翰
Chapter 8 Accounting for Receivables 高立翰 Study Objectives 1. Identify the different types of receivables. 2. Explain how companies recognize accounts receivable. 3. Distinguish between the methods and
More informationChapter 10. Learning Objectives. Receivables. Receivables. Horngren, Best, Fraser, Willett: Accounting 6e 2010 Pearson Australia
PowerPoint to accompany Chapter 10 Receivables Learning Objectives 1. Design internal controls for receivables 2. Use the allowance method to account for bad debts 3. Use the direct write-off method to
More informationChecklist for Observation of Physical Inventory Counts
Form AP 32 Index Reference Checklist for Observation of Physical Inventory Counts Legal Company Name Client: Balance Sheet Date: Instructions: This checklist may be used as a supplement to AP 30 Audit
More informationCHAPTER 9 AUDITING THE REVENUE CYCLE
A U D I T I N G A RISK-BASED APPROACH TO CONDUCTING A QUALITY AUDIT 9 th Edition Karla M. Johnstone Audrey A. Gramling Larry E. Rittenberg CHAPTER 9 AUDITING THE REVENUE CYCLE LEARNING OBJECTIVES 1. Identify
More informationFinancial Accounting. John J. Wild. Sixth Edition. McGraw-Hill/Irwin. Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Financial Accounting John J. Wild Sixth Edition McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 07 Reporting and Analyzing Receivables Conceptual Learning
More informationSOLUTION: AUDIT AND INTERNAL REVIEW, MAY 2014
SOLUTION 1(a) (a) The Auditing guideline points out that the amount or quantity of audit evidence required for the auditor to achieve the level of assurance is a matter of professional judgment. The factors
More informationThe University of Arizona Financial Services Office INFORMATION & INSTRUCTIONS
The University of Arizona Financial Services Office Special Fiscal Year End Reporting: Inventory, Accounts Receivable, Unearned Revenues, Prepaid Expenses & Deposits INFORMATION & INSTRUCTIONS May 19,
More informationFinal. Internal Audit Report. Creditors System
Final Internal Audit Report Creditors System Document Details: Reference: 1.2 / 2014-15 Senior Manager, Internal Audit & Assurance: David Jenkins ext 6567 Date: 7 th January 2015 This report is not for
More informationAccounting 201 Comprehensive Practice Exam 2C Page 1
Accounting 201 Comprehensive Practice Exam 2C Page 1 1. A business organized as a corporation a. is not a separate legal entity in most states. b. requires that stockholders be personally liable for the
More informationAccounting 303 Exam 3, Chapters 7-9 Fall 2011 Section Row
Accounting 303 Name Exam 3, Chapters 7-9 Fall 2011 Section Row I. Multiple Choice Questions. (2 points each, 34 points in total) Read each question carefully and indicate your answer by circling the letter
More informationChapter 9. Accounting for Receivables. McGraw-Hill/Irwin
Chapter 9 Accounting for Receivables Conceptual Learning Objectives C1: Describe accounts receivable and how they occur and are recorded C2: Describe a note receivable and the computation of its maturity
More informationwww.cebu-cpar.com Based on the above and the result of your audit, determine the adjusted balance of following:
CEBU CPAR CENTER, INC. AUDIT OF RECEIVABLES PROBLEM NO. 1 Your audit disclosed that on December 31, 2006, the accounts receivable control account of Alilem Company had a balance of P2,865,000. An analysis
More informationBUS512M. Module 5. Cash and Accounts Receivable BE6-1, E6-4, E6-5, P6-2
BUS512M Module 5 Cash and Accounts Receivable BE6-1, E6-4, E6-5, P6-2 Current Asset Classification A current asset is defined as any asset that is intended to be converted into cash within one year or
More informationDr. M.D. Chase Accounting Principles Examination 2J Page 1
Accounting Principles Examination 2J Page 1 Code 1 1. The term "net sales" refers to gross sales revenue reduced by sales discounts and transportation-in. 2. The cost of goods available for sale in a given
More informationAccounting 303 Exam 3, Chapters 7-9
Accounting 303 Exam 3, Chapters 7-9 Spring 2012 Name Row I. Multiple Choice Questions. (2 points each, 30 points in total) Read each question carefully and indicate your answer by circling the letter preceding
More informationOffice of the State Controller. Self-Assessment of Internal Controls. Accounts Receivable Cycle. Objectives and Risks
Office of the State Controller Self-Assessment of Internal Controls Accounts Receivable Cycle Objectives and Risks Agency Year-End Objectives Ensure that appropriate records are maintained for all businesses,
More informationChapter 9 Receivables
Accounting I John Petroff, Nancy Paz, Tibebe Mengistu, and KAREN DE AVILA (2011) Chapter 9 Receivables INTRODUCTION TO RECEIVABLES Receivables are any monetary claims against debtors. Credit can be granted
More informationReclamation Manual Directives and Standards
SUPPLEMENT TO THE DEPARTMENT OF THE INTERIOR DEPARTMENTAL ACCOUNTING MANUAL FILE: 08 ACCOUNTS RECEIVABLE 30 Allowance Account for Doubtful Receivables Subject(A): Purpose: Estimating the Allowance for
More informationAudit of Accounts Receivable. Internal Audit Report
Audit of Accounts Receivable Internal Audit Report July 2011 Table of Contents Executive Summary....3 1.0 Introduction... 5 1.1 Background... 5 1.2 Risk Assessment...6 1.3 Audit Objectives and Scope...
More informationAccounting for Bad Debts. Objectives. Doubtful Accounts. Created 2009 By Michael Worthington Elizabeth City State University
Accounting for Bad Debts Created 2009 By Michael Worthington Elizabeth City State University Objectives Define uncollectible accounts and writing-off bad debts Prepare journal entries for the Direct Method
More informationINTERNAL CONTROL QUESTIONNAIRE OFFICE OF INTERNAL AUDIT UNIVERSITY OF THE VIRGIN ISLANDS
Cabinet Member or Representative responsible for completing this form: INSTRUCTIONS FOR COMPLETING THIS FORM: Answer each question by placing an X in the either the Yes, No,, or Applicable () column. Provide
More informationSample Test Questions CHAPTER 7 CASH AND RECEIVABLES Answer No. Description MULTIPLE CHOICE Conceptual d 1. Identification of cash items. b 2. Identification of cash items. d 3. Classification of travel
More informationAssessment Schedule 2013 Accounting: Prepare financial information for an entity that operates accounting subsystems (91176)
NCEA Level 2 Accounting (91176) 2013 Page 1 of 7 Assessment Schedule 2013 Accounting: Prepare financial information for an entity that operates accounting subsystems (91176) Evidence Part A Question One
More informationUniversity of Missouri System Accounting Policies and Procedures
University of Missouri System Accounting Policies and Procedures Policy Number: APM 65.10 Policy Name: Allowance and Write-off for Uncollectible Student Loans General Policy and Procedure Overview: In
More informationAccounting 1. Lesson Plan. Topic: Accounting for Uncollectible Accounts Receivable Unit: 4 Chapter 21
Accounting 1 Lesson Plan Name: Terry Wilhelmi Day/Date: Topic: Accounting for Uncollectible Accounts Receivable Unit: 4 Chapter 21 I. Objective(s): By the end of today s lesson, the student will be able
More informationTitle Insurance and Settlement Company Best Practices
Title Insurance and Settlement Company Best Practices Wednesday, January 2, 2013 Mission Statement Title Insurance and Settlement Company Best Practices ALTA seeks to guide its membership on best practices
More informationObjective Evidence. Unit of Measurement. Accounting Period Cycle. Business Entity. Going Concern. Adequate Disclosure. Matching Expenses with Revenue
Accounting Concept: A source document is prepared for each transaction Objective Evidence Accounting Concept: Business transactions are stated in numbers that have common values; that is, using a common
More informationKANSAS CITY, MISSOURI RESPONSES TO THE FISCAL YEAR 2013 AUDIT MANAGEMENT LETTER
KANSAS CITY, MISSOURI RESPONSES TO THE FISCAL YEAR 2013 AUDIT MANAGEMENT LETTER Material Weaknesses (0) No material weaknesses were reported for FY 2013. Significant Deficiencies (1) Grant Receivable Accounting
More informationStudent Accounts Receivable
Student Accounts Receivable Original Implementation: July 15, 2008 Last Revision: April 14, 2015 PURPOSE This document establishes guidelines for the prudent collection of student accounts receivable in
More informationExam 3 Review. FV = PV (1 + i) n. Format. What to Bring/Remember. Time Value of Money. Solving for Other Variables Example. Solving for Other Values
Format Exam 3 Review http://fates.cns.muskingum.edu/~ plaube/acct301/default.htm 15 questions Multiple choice (12) Essay (2) Problem (1) What to Bring/Remember What to bring Calculator I ll bring scrap
More informationFINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT FACULTY ASSOCIATES, INC. GAINESVILLE, FLORIDA JUNE 30, 2011
FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT JUNE 30, 2011 FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT JUNE 30, 2011 TABLE OF CONTENTS Independent Auditors' Report... 1-2 Management's
More informationTHEME: ACCOUNTANTS RECEIVABLE
THEME: ACCOUNTANTS RECEIVABLE By John W. Day, MBA ACCOUNTING TERM: Accounts Receivable A current asset owed to the company by customers when they purchase goods and services. FEATURE ARTICLE: Working With
More informationCEBU CPAR CENTER M a n d a u e C I t y
1 of 11 CEBU CPAR CENTER M a n d a u e C I t y AUDITING PROBLEMS AUDIT OF CASH AND CASH EQUIVALENTS PROBLEM NO. 1 You were able to gather the following from the December 31, 2005 trial balance of Peso
More informationACCOUNTING SCHOLAR.COM GENERAL ACCOUNTING CHEAT SHEET This sheet is not for unauthorized distribution.
ACCOUNTING SCHOLAR.COM GENERAL ACCOUNTING CHEAT SHEET This sheet is not for unauthorized distribution. Table of Contents 1. Balance Sheet & Assets, Liabilities & Shareholder s Equity (Pages 2 and 3) 2.
More informationTest 3 Review. Student:
Test 3 Review Student: 1. A credit sale of $2,500 to a customer would result in: A. A debit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts
More informationAttachment C: Management Systems Questionnaire (MSQ)
Attachment C: Management Systems Questionnaire (MSQ) 1. Legal name of applicant organization: 2. Name and title of individual completing this questionnaire: A. General Information 1. Type of organization:
More information(a) Accounts Receivable... 23,000 Sales Revenue... 23,000. (b) Sales Returns and Allowances... 2,400 Accounts Receivable... 2,400
BRIEF EXERCISE 8-1 (a) Other receivables. (b) Notes receivable. (c) Accounts receivable. BRIEF EXERCISE 8-2 (a) Accounts Receivable... 23,000 Sales Revenue... 23,000 (b) Sales Returns and Allowances...
More information