ACL Case 3, Auditing

Assignment Help:
Sales are shipped FOB shipping point with credit terms n/45. You have verified that the last shipping number used in 2009 was 261,336 and that numbers were used in numerical order. Tolerable materiality is set at $500,000 for account receivable. You have asked for and received the following files related to account receivable, along with a file containing confirmation results.

File Name and Description Data Elements

All unpaid invoices at 12/31/2009 Customer No.

Invoice Number

Invoice Date

Amount

Ship Date

NSG Shipping Invoice Number

(Shipping number for each unpaid invoice) Ship No.

NSG Credit Customer No.

(Credit limit for each customer) Customer No.

Credit Limit

NSG Confirmation

(Results of the confirmation process. Invoice Number

There are four different Confirmed (Amount confirmed)

Confirmation files A, B, C and D) Comment (Explanation of the results of the confirmation

Required:

Use ACL to perform, or help perform, the procedures in the following audit program

Develop and turn in audit documents in the following order (property index each document for cross-referencing purposes):

The audit program with your initial and references filled in for each procedure.

A memo summarizing the results of the procedures (including the dollar impact of actual or potential misstatements) and identifying any additional procedures the results indicate should be performed. Be sure to provide cross- references to supporting printout and other documents

Appropriate printout that contain handwritten narrative explanations of each printout and its significance. Be sure to develop dollar information appropriate to each procedure to help identify the significance of any findings. Do not print out the entire Accounts Receivable or any related file. Extract only the items of significance.

Procedure Done by W/P Ref.

1. Foot the file and agree to the general ledger

2. Check for duplicate invoice numbers in the unpaid invoices and shipping files

3. Age the unpaid invoices and identify any unpaid invoices older than 45 days

4. Identify any customer balances that exceed the credit limit or for which there is no credit limit. (Customer number must be in ASCII format)

5. Perform a sales cutoff test

6. Determine if any customers have a negative balance and consider the need to reclassify those as liabilities.

7. Select a PPS (MUS) sample of unpaid invoices. Use tolerable misstatement (materiality) of $500,00 expected misstatement of $75,000 and a TD risk of 10%. There are four different files of confirmation results: A, B, C, and D. Your instructor will assign files to the class members. Combine the confirmation file with the sample file to determine the results of the confirmation process. Determine any misstatements and project the misstatements to the population.

8. Summarize the results of the above procedures and identify additional procedures those results indicate should be performed.

Related Discussions:- ACL Case 3

Ias 12 income taxes, IAS 12 Income Taxes 1AS 12 needs a deferred tax l...

IAS 12 Income Taxes 1AS 12 needs a deferred tax liability should be well known for all taxable temporary difference with minor exceptions as goodwill that is not allowable for

Audit procedures for obtaining audit evidence, AsList and define five audit...

AsList and define five audit procedures for obtaining audit evidence. (ii) Why is it necessary to obtain corroborating evidence for inquiry and observation? (iii) What is the dif

Forms of evidence, Forms of evidence a) Observation: is usually witne...

Forms of evidence a) Observation: is usually witnessing internal control and book-keeping procedures. It includes attendance at wages pay out. Observation of stock-take, open

Explain basic principles of an internal audit control system, The core prin...

The core principles of financial internal control are explained here: accounting and financial operations can be separated and the main purpose is the handling of cash and the copy

Managements interest in the accounting system, Managements interest in the ...

Managements interest in the accounting system Management needs complete and accurate books of accounts because: There is no other way the business can be controlled; Rec

Ias 40 investment properties, IAS 40 Investment Properties Audit work ...

IAS 40 Investment Properties Audit work common to all kinds of land and building will be used to establish ownership, existence and price. IAS 40 requires such companies may a

Need of assertions in obtaining audit evidence, Need of Assertions in Obtai...

Need of Assertions in Obtaining Audit Evidence Management is responsible for the fair presentation of financial statements which reflect the nature and operations of the entit

Internal Audit., #quInternal Audit checklist for fixed assetsestion..

#quInternal Audit checklist for fixed assetsestion..

Types of audits, Types of audits As far we have tended to think in sta...

Types of audits As far we have tended to think in state of the audit of limited companies, and certainly, the emphasis during this text will be on that companies incorporated

General verification procedures - audit process, General Verification Proce...

General Verification Procedures - Audit Process 1. Get or prepare a schedule for each and every class of liability. Usually this would indicate the makeup of the liability a

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd