Chapter Eight Quiz
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Chapter 8 Quiz
Note
: The material contained within these pages is taken directly from your textbook, Data Analytics for Auditing Using ACL
. Alterations were made only for formatting and the omission of specific questions. Reference Arens, A. A., Elder, R. J., & Borsum, C. J. (2017). Data Analytics for Auditing Using ACL
. (4
th ed.). Okemos, MI: Armond Dalton Publishers, Inc. Case #1 – Working with an ACL Table for the First Time: Complete the following requirements using ACL (Metaphor_EmpMast table): 8-1 b. How will you determine that all employees included in the Metaphor_EmpMaster data file work for the company and that all employees that work for the company are included in the data file? A. I would run the duplicate command on employee number and last name. I would verify if there were any duplicates, which there are none. I would then run the summarize command on title, salary, and pay per period. I then compared the results to the information provided. (See below)
8-1 c. Determine whether or not all employee birth dates fall before January 1, 2002. List exceptions, if any. A. I ran the sort command using birthdate, first and last name (42 records in total). It appears all employees were born prior to January 1, 2002. The youngest being born 12/14/1975 and the oldest being born 09/10/1944.
Case #2 – Simpson Company: Using ACL in the Audit of the Sales and Collection Cycle – Part 1 Answer all parts of the requirements on pages 8-9 – 8-15. It may be more convenient to complete the assignment if you remove pages 8-11 through 8-15 now. For each requirement, include the command you used, where applicable, and the correct answer or exception(s) found. For requirements that require a printed file, include the assignment number in the file(s) you upload to the instructor. You are assigned to audit of the sales and collection cycle for Simpson Company for the year ended 12/31/18. The assignments are included in three parts: Chapter 8 Part 1 - Planning the audit of the sales and collection cycle Chapter 9 Part 2 - Tests of controls and substantive tests of transactions in the audit of sales, collections, and other credits Chapter 10 Part 3 - Tests of the year-end balance of accounts receivable During the planning phase of sales and accounts receivable you will be working with three tables. These tables are already included in the Simpson project. _Simpson_Sales_Trans – Simpson 2018 sales transactions and related credits for the year 2018 with 1249 records, including the following transaction types and related information obtained from the IT department: o IN = Sales invoices totaling $1,525,763.83 o PM = Payments from customer totaling $980,466.09 o CM = Credit memos totaling $191,276.35 o WO = Write-offs totaling $4,725.85 _Simpson_Master – Simpson master file of accounts receivable, which includes 64 records _Simpson_Cutoff – Simpson shipping documents file for cut-off tests that includes 47 records Complete the following requirements using ACL. Use the Relations Command for all audit tests where Relations or Join are applicable.
8-2 a. Determine whether the record counts in the three tables are consistent with the information you received from the IT department. Explain your answer. A. 8-2 b. Determine if the amounts for each of the four transaction types are consistent with the information you received from the IT department. Explain your answer. 8-2 e. Determine the 12/31/18 balance in accounts receivable for each customer. Total the accounts and compare it to the general ledger balance of $481,900.19. Explain your answer. 8-2 f. Prepare and submit a list of the accounts receivable balances at 12/31/18 sorted from largest to smallest balance. The list should include only the customer name and balance outstanding. Case #3 – Mickelsburg Garden Equipment: Analyzing Sales Gross Margin Read the case and requirements on pages 8-17 – 8-19. For each requirement, include the command you used, where applicable, and the correct answer or exception(s) found. Complete the following requirement using ACL: 8-3 a. Determine whether management’s explanation about changes in volume and sales mix seems reasonable. Some of this analysis may be done without the use of ACL. Case #4 - Metaphor Industries: Assessing Inventory Risks and Planning Inventory Observation Read the case and requirements on page 8-23. For each requirement, include the command you used, where applicable, and the correct answer or exception(s) found. Complete the following requirements using ACL: 8-4 a. Metaphor has several inventory locations. The observation plan is to observe inventory at the two locations with the largest dollar cost, and a third location selected from the remaining locations. Last year the third location tested was location 04. Indicate the following information:
1. Number of inventory locations: 2. Determine the information below for the two locations with the largest dollar cost:
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(1) Location codes (2) Total cost of each (3) Total market value of each 3. Indicate the third location you have chosen for testing. Explain your reason for choosing this location. 4. Save out a table summarizing (1) location code; (2) number of inventory items; (3) total cost. 8-4 b. Determine the amount that the total market value of the inventory exceeds total cost. 8-4 c. Prepare a file of all inventory items where total cost exceeds market value. The file should include the inventory part number, total cost of each item, market value, excess of cost over market value, and dollar totals for these fields. 8-4 d. Do a Cross-tabulation of LOCATION and PRODSTAT (product status) fields. Select the two location/product status combinations with the highest dollar total cost and prepare a file of all inventory items over $10,000.
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