Audit Program Design Ii

Audit Program Design Part II

Sales and Collection Cycle

Sales and collections audits test financial information relating to the sales of goods and services to consumers and the payment collection for these sales.

There are several functions include in this cycle such as processing customer orders, granting credit , shipping goods, billing customer , recording sales , processing cash receipts, sales return & allowances process, charging off uncollectible accounts receivable and provision for bad debts. Auditors will also compare the company's accounting manual to Generally Accepted Accounting Principles (GAAP) to ensure that Apollo Shoes has no major violations of GAAP have occurred. Other testing measures verify that the sales is to a legitimate outside individual

AOW will verify whether sales invoices are attached to the bill of lading or not and check to see if there are any invoices with unusual transactions or amounts to test for existence. Next, we will check completeness by verifying the sequence of sales documents and trace the selected sales documents through the sales and collection process. AOW will also verify prices of selected sale items and re-compute the sales invoices that are billed to the customer for accuracy. The next step is to verify the classifications of sales transactions by examining the document package for internal verification and examining sales invoices for proper account classifications. The final audit objective test will consider timing. We will verify that sales are recorded on the correct dates. We will also verify the shipping documents with sales transactions and customer invoices for accurate dates and correct sequences.