The following are audit procedures in the sales and collectioncycle:1. Add the columns on the aged trial balance and compare the total with the generalledger.2. Examine a sample of shipping documents to determine whether each has a salesinvoice number included on it.3. Examine a sample of customer orders and see if each has a credit authorization.4. Compare the date on a sample of shipping documents a few days before and afterthe balance sheet date with related sales journal transactions.5. Discuss with the sales manager whether any sales allowances have been grantedafter the balance sheet date that may apply to the current period.6. Observe whether the controller makes an independent comparison of the total inthe general ledger with the trial balance of accounts receivable.7. Compare the date on a sample of shipping documents throughout the year withrelated duplicate sales invoices and the accounts receivable master file.8. Compute the ratio of allowance for uncollectible accounts divided by accountsreceivable and compare with previous years.a. For each procedure, identify the applicable type of audit evidence.b. For each procedure, identify which of the following it is:(1) Test of control (3) Analytical procedure(2) Substantive test of transactions (4) Test of details of balancesc. For those procedures you identified as a test of control or substantive test of transactions, what transaction-related audit objective or objectives are being satisfied?d. For those procedures you identified as a test of details of balances, what balancerelated audit objective or objectives are being satisfied?
The following are
cycle:
1. Add the columns on the aged
ledger.
2. Examine a sample of shipping documents to determine whether each has a sales
invoice number included on it.
3. Examine a sample of customer orders and see if each has a credit authorization.
4. Compare the date on a sample of shipping documents a few days before and after
the
5. Discuss with the sales manager whether any sales allowances have been granted
after the balance sheet date that may apply to the current period.
6. Observe whether the controller makes an independent comparison of the total in
the general ledger with the trial balance of
7. Compare the date on a sample of shipping documents throughout the year with
related duplicate sales invoices and the accounts receivable master file.
8. Compute the ratio of allowance for uncollectible accounts divided by accounts
receivable and compare with previous years.
a. For each procedure, identify the applicable type of audit evidence.
b. For each procedure, identify which of the following it is:
(1) Test of control (3) Analytical procedure
(2) Substantive test of transactions (4) Test of details of balances
c. For those procedures you identified as a test of control or substantive test of transactions, what transaction-related audit objective or objectives are being satisfied?
d. For those procedures you identified as a test of details of balances, what balancerelated audit objective or objectives are being satisfied?
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