Apollo Shoes, Inc.
Relevant Matters from Minutes
Information Relevant to 2011 Audit
January 5, 2011
Larry Lancaster, Chairman, President, and
CEO is a new hire (Aggressive Nature)
Sales expected to increase 10%
COGS and exp.
9-49 CVP Analysis in a Professional Service Firm (25 min)
1. If operating profit is to increase the contribution margin of the new business must be
Y + Revenue from New Work = Variable cost + Fixed cost + profit
Y + $60(800) = $20(800 + 900) + $
7.72 Mini-Case: Confirmations
2. The auditors should have followed up after receiving questionable evidence. The auditor
should always have a skeptical mindset. And since it was from an independent source, the
auditors could have called or gone to their p
7.57 Control Objectives and Procedures Associations
1. a) Occurrence
2. 1. c
2. a, b
3. a, b, d
8. a, b, e
15. a, c,
6.47 Procedures for Auditing a Clients Bank Reconciliation.
a. A- 4, 9
B- 1, 7, 8, 9, 10
C- 2, 7, 8, 9, 10
E- 5, 9
b. The outstanding checks are actually $ 13,480 and not $ 11,450. Someone did this because
it would make the balances match causin
6.45 Test of Controls over Cash Receipts
Other Audit Procedure
The deposit slips should be traced to the A/R
ledger and visa-versa.
The entries in the general ledger for cash
should all be investigated and make sure each
have supporting documents.
6.43 Tests of controls over Cash Disbursements
Make sure cash disbursements amounts are calculated correctly and recorded accurately.
Test of Controls
1. Recalculate amounts on invoices to compare with checks written
2. Recalculate any