Review the changes that made for accuracy. If there are any discrepancies occur, make sure to solve it immediately before proceeding to processing. 4. Payroll Processing. Compute the hours that need to be paid from the timesheets into the system.
The accounts are assessed base in accordance with the generally accepted accounting principles (GAAP) to ensure they are represented fairly. Tests of Controls The test of controls purpose for the acquisition and payments cycle is for the detection of understatements. Tests of controls for this cycle would include: 1. Verify that correct documents (purchase order, purchase requisition and vendor’s invoice) are prepared and attached to the voucher and examined for existence when submitted to appropriate departments. 2.
Case 2.3: Happiness Express, Inc. 1. The primary audit objectives used by auditors to accomplish by confirming a client’s year-end accounts receivable is stated in SAS No. 67, the Confirmation Process. The assertions used by this standard include existence or occurrence, completeness, and valuation. The existence assertion is to make sure that the client and accounts exist, the completeness is to make sure that all of the balances are recorded, and the valuation is to make sure that the balances are recorded at the correct amount.
RCV Auditing firm will conduct part III of the audit of Apollo Shoes and will focus on two areas of concern, those being Inventory and warehousing cycle and Cash cycle. Within the scope of our audit we will review such items as receiving of materials, storage, purchase orders, shipping of orders. We will also review the company’s cash cycle such as receiving payments, cash posting, bank reconciliations and verification. Inventory and Warehousing Cycle There are several steps in the inventory and warehousing cycle of Apollo Shoes that will be reviewed for accuracy and completeness of policies and procedures in place. The first area that will be reviewed will be test of controls within the inventory and warehousing cycle such as: Inventory
Finally, the test of controls for the posting and summarization objective will be to examine evidence that the accounts receivable master file is reconciled to the general ledger and observe whether monthly statements are sent to customers. Transaction-Related Audit Objectives Key Internal Controls Tests of Controls Substantive Tests of Transactions Recorded sales transactions are accurate. Sales and amounts are internally verified for description of the order and quantity. Examine indication of internal verification Compare recorded transitions in the sales acquisitions journal with the vendor’s invoice, receiving report, and other supporting documents. Sales invoices, shipping documents, and sales orders are pre-numbered for Apollo.
Trace transactions recorded in the acquisitions journal to supporting documentation, comparing the vendor’s name, total dollar amounts, and authorization for acquisition. This is primarily a test of controls. The purpose is to ascertain if the documentation supporting acquisition transactions are properly recorded. This makes sure that acquisition journal has authorization for purchase, the vendor's name, and the total dollar amounts. So the acquisition entries are supported by adequate information.
GAAP cover such things as revenue recognition, balance sheet item classification and outstanding share measurements. Companies are expected to follow GAAP rules when reporting their financial data via financial statements. If a financial statement is not prepared using GAAP principles, be very wary! Therefore, you still need to be careful and review other financial reports which can be altered. Convergence means that the U.S. Financial Accounting Standards Board (FASB) and the Independent Accounting Standard-setting Body (IASB) would continue working together to develop high quality, compatible accounting standards over time.
complete an audit of all the financial data on a yearly basis. Human resource controls are needed. Each employee responsible for handling cash should be Bonded. Bonding is done by acquiring insurance that covers liabilities on assets caused by fraud or misappropriation of funds that could occur from employees mishandling cash. You would need to include all employees who handle cash on the application.
The Board is completing an update to the Conceptual Framework for Financial Reporting in order to give it a more complete, concise and updated set of concepts to use when the Board develops or revises IFRS Standards. The Conceptual Framework for Financial Reporting describes the basic concepts and objectives of general purpose financial reporting. It underlies the preparation and presentation of financial statements for external parties. It is an empirical tool that helps the International Accounting Standards Board (IASB) develop requirements in IFRS Standards which is based on clear and regular principles (ifrs, 2018). These principles, on the other hand, must bring about the Board developing IFRS Standards that makes it necessary for entities to present more important, comparable and clear information in financial statements.
This also includes educating staff about the responsibilities of maintaining costs. What are the reports that can be used for financial planning in an organisation? Profit and Loss Balance sheet Revenue and Expenditure report Cash flow statement Debtors and Creditors reports What is the process for preparing budgets or other financial plans? 1. Identify data that needs to be collected.