Apollo Shoe Case

Apollo Shoe Case

This paper will discuss the internal controls and auditing of Apollo Shoes Inc.. Apollo Shoes Inc. is lead by Larry Lancaster, CEO, President, and chairman of the Apollo Shoes board of directors. Apollo Shoes growth has been extraordinary the past few years but the company has failed to address their financials by not auditing their net income for the past year. This paper will address the company’s sales transaction processing, strengths and weaknesses, and the revenue cycle.

ICQ for Apollo

Internal Control Questionnaire—Sales Transaction Processing

Assertions and Questions Yes, No, N/A

Comments

Occurrence assertion:

1. Is the credit department independent of the sales department?

Yes

Credit manager in Treasurer's Department

2. Are sales of the following types controlled by the same procedures described below? Sales to employees, COD sales, disposals of property, cash sales, and scrap sales.

N/A

Not enough information found

3. Is access to sales invoice blanks restricted? Yes Kept in locked closet and remove only for billing clerk use

4. Are pre-numbered bills of lading or other shipping documents prepared or completed in the shipping department?

Yes These document are prepared or completed in this department (Shipping Department)

Completeness assertion:

5. Are sales invoice blanks pre-numbered? Yes Sales invoice blanks are pre-numbered

6. Is the sequence checked for missing invoices? Yes When sales invoices are recorded, the numerical sequence shall be checked by an accounts receivable clerk, and missing invoices must be located and explained.

7. Is the shipping document numerical sequence checked for missing bills of lading numbers? N/A Not enough information

Accuracy assertion:

8. Are all credit sales approved by the credit department prior to shipment? Yes Credit manager checks the customers’ accounts receivable balances and other credit file information using a computer-based...