Perform acl test and prepare a report with conclusions

Assignment Help Theory of Computation

Reference no: EM13903388

Questions:

Read the Bradmark Case located in the "Bradmark Case Description" folder and answer the following questions:

1) From the case description and the associated flowcharts, assess Bradmark's internal controls over its revenue cycle procedures.

2) Using the case description, the flowchart, the file structures, and the selected financial data below, specify an audit objective (that can be achieved using ACLTM) for each management assertion presented in the matrix below. For each audit objective, briefly describe the ACL test procedure. As an example, the first row in the matrix has been completed for you.

Selected Bradmark Financial Data

Sales 5,379,996.96

Accounts Receivable 4,752,257.70

Allowance for Doubtful Accounts (.02 x Sales) 107,600

Net Accounts Receivable 4,644,657.70

Management Assertion	Audit Objective	Audit Procedures to be Performed Using ACL
*Existence or Occurrence*	*Verify that the AR represents actually owed to Bradmark*	*Use ACL to prepare confirmation letters for customers*
*Completeness*	Determine that A/R represent all amounts owed by organization for purchases of goods and services as of the balance sheet date. Ensure that shipped goods, services rendered, and/or returns and allowances for period are included in financials	Review sales invoices for unusual trends and exceptions Review Sales Invoice and Shipping Log Files For Missing and Duplicate Items Review Line Item and Inventory Files for Sales Price Accuracy To determined what are the unrecorded assets (AR)
*Valuation or Allocation*	Determine AR balance stated in net realizable value Establish allocation for uncollectible accounts is appropriate	Corroborate or refute AR is stated at reasonable Net Realizable Value (Aging A/R)
*Accuracy*	Ensure that revenue transactions are accurately computed, based on correct prices amd quantities. Ensure AR subsidiary ledger, sales invoice file, remittance file are mathematically correct And agree with GL accounts	Review sales invoices for unusual trends and exceptions Review Sales Invoice and Shipping Log Files For Missing and Duplicate Items Review Line Item and Inventory Files for Sales Price Accuracy

3) Perform the ACL tests outlined in step 2 above. Hand in a report describing the audit tests and your conclusions about the results of the test. To document your findings include in your report ACL printouts showing details of test results and the command log.

4) Using the matrix format below, identify an operational (business) concern related to the revenue procedures. Briefly describe the audit objective and ACL procedures to answer this concern. Perform the ACL test and prepare a report with your conclusions. Document your report with ACL printouts showing details of test results and the command log.

Other Operational Concerns

Audit Objective

Audit Procedures to be Performed Using ACL

§ - Focus on large and

§ unusual transactions,

§ especially near period-

§ end

- Recognizing revenues from sales that did not occur

- Recognizing revenues BEFORE they are realized

- Failing to recognize cutoff points

- Underestimating allowance for doubtful accounts

- Shipping unsolicited products to customers, subsequently returned

- Billings customers for products held by seller

Reference no: EM13903388

Questions Cloud

Evaluate the message above using the evaluation guide : Evaluate the message above using the evaluation guide provided

What action would you recommend to the board of regents : What action would you recommend to the Board of Regents and how should Strutledge go about making a strategic decision such as this?

What claims might barnes bring against pentrix : What claims might Barnes bring against Pentrix

Us politicians goal of reducing the country : Use the corresponding models and the interest rate and exchange rate effects to evaluate the respective effects of the two proposed policies in view of the US politicians' goal of reducing the country's twin deficit and make well-argued policy rec..

Perform acl test and prepare a report with conclusions : Perform the ACL test and prepare a report with your conclusions. Document your report with ACL printouts showing details of test results and the command log - Identify an operational concern related to the revenue procedures.

Combination of barrels of pruned and regular olives : The best combination of barrels of pruned and regular olives

Explain the differences in accounting for the flow of costs : Explain the differences in accounting for the flow of costs using traditional accounting, where accountants charge costs first to inventory accounts, and using JIT.

Identify absolute and comparative advantage of u.s.and japan : Identify absolute and comparative advantage of U.S. and Japan

Serving of ice cream contains : Phoebe is trying new diet. She gets 35 grams of fat a week to "spend" on her two favorite foods, French fries and Ice cream. A serving of French fries contains 3 grams of fat and a serving of Ice cream contains 2 gram of fat.

User Account

All Pages