HenricoRetail2006 - Henrico Retail, Inc.1 Understanding the...

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Henrico Retail, Inc. 1 Understanding the IT Accounting System and Identifying Audit Evidence for Retail Sales OBJECTIVES Outline the audit trail for processing retail sales transactions Develop audit plans for gathering evidence to test the existence and valuation of retail sales Recognize when audit evidence must be gathered electronically if a traditional paper trail is absent Henrico Retail, Inc., is a first-year audit client. The audit partner obtained this background information about the sales system after recently meeting with client personnel at the corporate office. Henrico's sales system is computer-based with computerized cash registers on the floors of all of its stores. At the point of sale, Henrico's sales personnel enter product number, quantity per product, and indication of whether it is a cash sale or credit sale. Additionally for credit sales, the sales personnel must enter customer credit card number and credit approval number obtained directly from the credit card agency approving the credit sale. Henrico only accepts VISA or MasterCard credit cards and a copy of the credit charge slip is maintained in the cash drawer. The computerized cash register performs the following: 1. Identifies correct price based on product number 2. Notifies clerk if product number is invalid 3. Calculates total price of purchase (price x quantity) 4. Extends totals, calculates sales taxes, and determines final transaction amount 5. Generates a customer receipt and a duplicate record of the transaction on a cash register tape that is locked inside the register. Cash register tapes indicate all inputted information.
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This note was uploaded on 01/23/2012 for the course BUSI 4900 taught by Professor B.c. during the Fall '11 term at Carleton CA.

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HenricoRetail2006 - Henrico Retail, Inc.1 Understanding the...

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