Bodow is an
Bodow is an entertainment complex located in Trinidad & Tobago. It offers various activities
such as music, rides, slides, and souvenir shopping, and customers pay a fixed fee to enter.
The complex has been in operation for the past seven years and remains open throughout the
year. However, weather-related issues often lead to a significant decrease in customer
attendance, usually by 50%, on approximately 30 days each year.
Bodow has experienced substantial success, with customer numbers increasing by
approximately 15% annually. Sales at Bodow are categorized as cash sales and credit card
sales. All ticket sales are recorded on a computer, including the amount of each sale and the
number of tickets issued. This information is electronically transferred to the accounts office.
Cash collected from each ticket office is counted by two accounts clerks and two security
guards before being banked daily. The total cash from each ticket office is reconciled with the
sales information transferred from each office. The cash received is then recorded in the
book
Credit card payments are authorized online during ticket purchases, and the sales information
is recorded on computers in each ticket office. This data is also electronically transferred to
the accounts office. Credit card sales are recorded for each credit card company in a
receivables ledger. When payments are received from the credit card companies, the accounts
clerks verify the total sales values against the amounts received, minus the commission
payable to the credit card companies. The receivables ledger is updated accordingly.
In addition to the sales information, there are other relevant details for the audit planning of
Bodow. The directors of Bodow have verbally confirmed to the external audit firm that the
bank overdraft balances included in the current liabilities are complete. Also, Bodow has
made significant investments in the complex, resulting in expenditures for updating,
repairing, and replacing various buildings. Finally, fixed assets have been disposed of, and
the life of remaining fixed assets has been revised, leading to reduced depreciation.
Required:
Identify the substantive analytical procedures that may be used to give assurance on
the total income from ticket sales:
i) For one day in Bodow?
ii) For the year in Bodow?
4. For the cash sales system of Bodow, identify the risks that could affect the assertion
of completeness of sales and cash receipts.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
