Apollo Shoes Audit Program Design

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Audit Program Design Part III In continuation of the audit program design for Apollo Shoes, Inc. including (a) a design tests of controls, substantive tests of transactions, and analytical procedures for the inventory and warehouse cycle, (b) a design tests of controls, substantive tests of transactions, and analytical procedures for the cash cycle. It will be discuss accordingly to requirements and proper process with corresponding procedures. Inventory and warehouse cycle The purpose in audit inventory cycle takes different functions depending of the nature of the type of business. As a retail or wholesale the large account or part of the financial statements is the merchandise inventory availability for retail sale. Our goal for Apollo…show more content…
Parts of audit verification involves transactions of cash for misstatements in improper payments or failure to receive cash such as: failure to bill a customer, duplicate payments of invoices, improper payment, payment for raw material not received, payment to employee for different hours than what timesheet is recorded, and others. As part of test of bank reconciliation will include: checks not cleared but being recorded as cash disbursements, cash received to subsequent to the balance sheet date but recorded as cash receipts in current year, payments on notes payable debited directly to bank balance but not entered in client’s record and others ( Arens, Elder & Beasley,…show more content…
For auditing year-end cash will utilized objectives in order to (1) find the internal controls related to each audit objective; (2) designing tests of controls related to the support of a reduced control risk, and (3) substantive tests of transactions design that tests each objective for monetary misstatements. In the audit the tests of controls for the cash cycle will involve observing if the Apollo Shoes accountant reconciled the bank account; observing cash receipts; examining files; verifying monthly statements; examining evidence related to internal verification, and observe cash that has not been recorded during a specific period. Substantive transaction tests involves reviewing cash receipts; duplicate deposit slips; preparing proof of cash receipts; using audit software to trace sales journal totals to the general ledger; and comparing deposit dates from the bank statements (Arens, Elder & Beasley, 2012). And because cash balances is affected by the other cycles except inventory and warehousing cycle the controls over cash receipts in the audit of cash transaction are thoroughly audited. The year-end bank reconciliations are usually extensive audit and using analytical procedures are test for reasonableness of cash balances. Auditor will compare ending balances on bank reconciliation, deposits, any outstanding checks, and other reconciliation items. In order to audit any cash in the bank, the

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