Audit

Chapter 16:Completing The Tests In The Sales And Collection Cycle:Accounts Receivable

16-25 The following are audit procedures in the sales and collection cycle:

Required : a) For each procedure,identify the applicable type of audit evidence .

b) For each procedure,identify which of the following it is:

1)Test of control

2) Subsantive test of transactions

3) Analytical procedures

4) Test of details of balances

c) For those procedures you identified as a test of control or substantive test of transactions,what transaction-related audit objective or objectives are being satisfied?

d) For those procedures you identified as a test of details of balances,what balance-related audit objectives are being satisfied?

1) Examine a sample of shipping documents to determine whether each has a sales invoice number include on it.

a) documentation

b) substantive test of transactions

c) completeness

d)

2) Discuss with the sales manager whether any sales allowances have been granted after the balance sheet date that may apply to the current period.

a) inquiries all the climb

b)test of details

c)

d) cutoff for accounts receivable is correct

3) Add the columns on the aged trial balance and compare the total with the general ledger.

a) analytical procedures

b) test of details

c)

d)Existing account receivable are included

4) Observe whether the controller makes an independent comparison of the total in the general ledger with the trial balance of account receivable.

a) observation

b) test of details

c)

d)Existing account receivable are included

5) Compare the date on a sample of shipping documents throughout the year with related duplicate sales invoices and the accountsreceivable master file.

a) documentation

b) substantive test of transaction

c) timing

d)

6) Examine a sample of customer orders and see if each has a credit...