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

Types of transaction - related party, Types of Transaction - Related Party ...

Types of Transaction - Related Party Fundamentally two types of transactions which arise between a related party and a company as: A. It is usual for members of a collectio

Audit procedures on investment, describe how the auditors would determine t...

describe how the auditors would determine that all investments income from shares had been properly recorded in the accounting records

Building societies - specialized audit situation, Building Societies - Spec...

Building Societies - Specialized Audit Situation Building Societies are organisations that exist to offer a savings and investment intermediate to the public and to lend to pe

Valuation - auditing process, Valuation - Auditing Process IAS 16 requ...

Valuation - Auditing Process IAS 16 requires that all assets for use through the business have been valued on the basis of depreciated historic costs along with one exception.

Meaning of true in auditing, Meaning of True in Auditing Meaning of 't...

Meaning of True in Auditing Meaning of 'true and fair'/present fairly' Truth in accounting is quite different form scientific truth.  Accounting does without a deal along w

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

Authoritative document is ias 17 leases, Authoritative Document is IAS 17 L...

Authoritative Document is IAS 17 Leases The suitable technique of amortization or depreciation to require in the case of leasehold property and freehold buildings is straight-

Ias 37 provisions and contingent assets, IAS 37 Provisions, Contingent Asse...

IAS 37 Provisions, Contingent Assets and Contingent Liabilities IAS 37 was mattered in order to deal along with the subjective area of provision and to prevent the requiremen

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