Auditing Program Design Part Iii Essay

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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 report should match physical counts Compare and review inventory and receiving reports to the general ledger amounts Test transactions for value correctness Do a random sampling to verify counts Observe inventory count Verify controls in warehouse system Verify storage of raw materials Verify receiving process Match receiving records to purchase orders Tag inventory and verify that inventory has not moved to other locations All areas of inventory and warehousing cycle are important to Apollo Shoes to ensure that the company has the proper policies and procedures in place to deter any possible fraud within the company. Our audit team will review receiving documents and verify that these have been properly matched to purchase orders and approved by authorized company personnel. Our audit team will also review and verify that all inventory has been properly recorded into Apollo Shoes’ computer system. Cash Cycle Within Apollo Shoes’ cash cycle our audit team will review the process of cash receipts, cash posting, receivables, bank reconciliation and verification of general ledger cash account. This will ensure that

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