ch7 7-61 Solution

ch7 7-61 Solution - 7.58 Control Assertion Associations...

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Control Assertion Associations Error Assertions a) Sales recorded, goods not shipped Occurrence b) Goods shipped, sales not recorded Completeness c) Goods shipped to a bad credit risk customer Accuracy d) Sales billed at the wrong price or wrong quantity Accuracy e) Product A sales recorded as Product line B Classification f) Failure to post charges to customers for sales Completeness g) January sales recorded in December Cutoff 7.59 Client Control Procedures and Audit Tests of Controls For each client control activity numbered 1-15, write an auditor’s test of control procedure that could produce evidence on the question of whether the client’s control has been installed and is in operation. Sales Invoice Sample : Select a sample of random numbers representing recorded sales invoices, and 1(a). Inspect the attached sales order for credit approval signature. 1(b). Trace customer to up-to-date credit file/information underlying the credit approval. 2. Inspect the attached shipping document for (i) existence, and (ii) prenumbering imprint. 3. Compare billed quantity on sales invoice to shipped quantity on shipping document. 4. Find the sales invoice associated with the random number (failure to find this means an invoice wasn’t recorded). Alternatively, use computer to add up the recorded sales invoice numbers and compare to a sum of digits check total. 5. Compare sales invoice to sales order for quantity, price, and other terms. 6. Compare prices on sales invoice to approved price list. 7. Check product line code for proper classification compared to products invoices. 11. Compare invoice date to shipping document date. 14.
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ch7 7-61 Solution - 7.58 Control Assertion Associations...

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