Question 09 William Jackson, the CEO of RPL, has requested that the tests of controls only be performed once due to the disruption caused by audit staff to the work of the staff in the printing and shipping department. In addition, he has requested that the tests of controls occur only during July 2018, as this is traditionally the quietest time of the year for RPL. You expect the audit report to be signed on 15 August 2018. B. For each of the audit procedures you described in a, outline the result you would expect if you determined that the control activity was not reliable. Accounting system automatically stops the order for any publishers who have exceeded their credit terms and limits IT application control. When an order exceeds the credit limit, an authorisation from both the heads of publishing and accounts is required for the transaction to proceed manual control. The accounts receivable clerk checks the prices and arithmetic accuracy of the invoices and signs the invoice as evidence of her check. The cashier reconciles the total of the batch postings to accounts receivable to the amount banked for the day. The assistant accountant prepares a bank reconciliation each month Segregation of duties between accounts receivable and cash handling functions.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter8: Fraud, Internal Controls, And Cash

Section: Chapter Questions

Problem 12MC: The external auditor of a company has certain requirements due to Sarbanes-Oxley. Which of the...

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Question 09

William Jackson, the CEO of RPL, has requested that the tests of controls only be performed once due to the disruption caused by audit staff to the work of the staff in the printing and shipping department. In addition, he has requested that the tests of controls occur only during July 2018, as this is traditionally the quietest time of the year for RPL. You expect the audit report to be signed on 15 August 2018.

B. For each of the audit procedures you described in a, outline the result you would expect if you determined that the control activity was not reliable.

Accounting system automatically stops the order for any publishers who have exceeded their credit terms and limits IT application control.
When an order exceeds the credit limit, an authorisation from both the heads of publishing and accounts is required for the transaction to proceed manual control.
The accounts receivable clerk checks the prices and arithmetic accuracy of the invoices and signs the invoice as evidence of her check.
The cashier reconciles the total of the batch postings to accounts receivable to the amount banked for the day.
The assistant accountant prepares a bank reconciliation each month
Segregation of duties between accounts receivable and cash handling functions.

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