Sales and Collection Cycle The sales and collection cycle will entail researching of Apollo Shoes journal of sales in search of abnormal transactions and records. The process of this audit test procedures begins when a customer purchases a product from Apollo, and ends with the receipt of the complete payment from the customer. The test of controls the auditors will perform comprises the completeness, accuracy, and classification of transactions and will include accounting for a sequence of shipping documents, observing whether monthly statements are sent, and examining document packaging for internal verification. It will also test of controls for a sequence of shipping documents and the substantive tests will be to compare the date of recording the sale in the sales journal with duplicate sales invoices and bills of lading. 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.
There are four types of transactions involved in the inventory and warehousing cycle of Apollo Shoes, Inc., ordering of goods for sale, receipt of the ordered goods, storage of the merchandise, and the shipping of goods to customers. Each of these processes requires that the auditor verify that adequate controls are maintained and that the proper documents are in place for each portion of the process. Therefore, the audit will involve analytical procedures, test of controls and substantive tests on each part of the cycle. Analytical procedure Given the fact that the inventory process will vary between companies, Anderson Olds and Watershed will obtain a thorough understanding of the entire flow of goods from purchase to shipment within the Apollo Shoes organization. Analytical procedures “examine the relationship of inventory account balances with other financial statement accounts” [ (Arens, Elder, & Beasley, 2006, p. 689) ] and are used to “assess the reasonableness of inventory-related balances” [ (Arens, Elder, & Beasley, 2006, p. 689) ].
Audit Program Design Part II Aquilla Carroll-Pendleton Alison Marlo Darrell Morris Cliff Parchmon ACC/546 November 4, 2013 Chandria Willis Audit Program Design Part II A part of designing Apollo Shoes' audit program includes testing controls for the company's various cycles. At this point in the audit planning, tests of controls, tests of transactions, and analytical procedures are designed for the following cycles: sales and collections, payroll and personnel, and acquisition and payment. Sales & Collection Cycle Tests of Controls Tests of Transactions Analytical Procedures Payroll & Personnel Cycle Tests of Controls Tests of Transactions Analytical Procedures Acquisition & Payment Cycle The auditing and acquisition cycle of the audit process for Apollo Shoes, Inc. will include test of controls, substantive tests of transactions, and analytical procedures. "The acquisition and payment cycle involves the decisions and processes necessary for obtaining the goods and services for operating a business" (Arens, Elder, & Beasley, 2012). The accounts are assessed base in accordance with the generally accepted accounting principles (GAAP) to ensure they are represented fairly.
Audit Program Design Part III Senyo Adiko ACC/546 June 9, 2013 Chandria Jones Audit Program Design Part III During phase III of Apollo shoes audit plan, we will focus on the inventory and warehouse cycle as well as the cash cycle. Cash and inventory are vulnerable to fraudulent activities so it is important to assess the risks of those areas. We are responsible to conduct an unbiased and fair audit according to the PCAOB auditing standards. Our center of interest would be about the objectives of the audit, tests of controls, and substantive tests of transactions. We will also conduct analytical procedures for both cash, and inventory and warehouse cycles.
TABLE OF CONENTS INTRODUCTION PG 1 COMPANY EVALUATION PG 2 COMPLIANCE AND RECOMMENDATION PG 4 SUMMARY / CONCLUSION PG 5 REFERENCES PG 6 Introduction The primary objective of Accounting Ink, is to provide LJB Company with the required information to consider the regulations for converting to a publicly traded company. Within this analysis we will identify internal controls currently being used within business operation and the required mandated internal controls enforced by the Sarbanes Oxley Act. Internal Controls are established and or regulated by the Sarbanes-Oxley Act. There are six principles of internal controls 1) Establishment of responsibility, 2) Segregation of Duties, 3) Documentation Procedures, 4) Physical Controls, 5) Independent Internal Verification and 6) Human Resource Controls (Keller, 2012). Companies and their independent accountants or auditors should report the effectiveness of the companies internal controls based on these six principles.
Which of the following best describes what is meant by U.S. generally accepted auditing standards? (1) Acts to be performed by the auditor. (2) Measures of the quality of the auditor’s performance. (3) Procedures to be used to gather evidence to support financial statements. (4) Audit objectives generally determined on audit engagements.
Case Study Cloud 9 Part 1 – Materiality 1. Using the 30 September 2014 trial balance (in the appendix), calculate planning materiality and include the justification for the basis that you have used for your calculation. 2. Based on your results from researching the client and its industry in chapter 1 and chapter 2, discuss the inherent risks in the audit of Cloud 9 Pty Ltd. Identify the associated financial accounts that would be affected and provide an assessment of ‘high’, ‘medium’, or ‘low’ in relation to the likelihood and materiality of the risk occurring. Solution 1.
Checkpoint: Debits and Credits Terra Ballenger XACC 280: Financial Accounting Concepts and Principles August 16, 2012 Paul Gomez Associate Level Material Appendix B Debits and Credits Consider the information presented in PhxKlips™ Debits and Credits. Pay particular attention to the meaning of debits and credits and their effects on accounts. Then follow the instructions below. 1. Write a response to the following questions: In what two ways is the word debit defined in Debits and Credits?
Hammersmith Tools Limited The underlying accounting policies have been applied in the preparation of the financial statements of Hammersmith Tools Ltd. Statement of Accounting Policies For the Year ending 31 December 2011 1. Purpose The purpose of the following statement of Accounting policies is to act as a guide to non-accounting employees on basic accounting procedures that are employed in the company while determining the overall profits of the company. 2. Basis of Preparation The financial statements are prepared in accordance with the applicable law and under the convention of Historical cost.
Issues 1. Identify internal control risks generally faced by a brokerage firm. Identify specific control risks posed by Hanauer’s operations. Did Hanauer’s auditors properly investigate these risks and take them into consideration when planning their year-end tests? 2.