Recorded sales are for Credit is approved Examine customer order Thereisalack Account for a sequence shipments actually automatically by computer __for evidence of credit of internal of sales invoices (12). made to nonfctitious by comparison to authorized approval (I3e). vetification for Review sales journal and customers credit limits (C1). the possibility ‘master file for unusual (occurrence). Sales are supported by Examine sales invoice for of sales ‘transactions and ‘authorized shipping supporting bill of lading invoices being amounts (1). documents and approved and customer order recorded more Trace sales journal entries customer orders (C2). (135). than once ‘to supporting documents, Batch totals of quantities Examine file of batch totals (01). including duplicate sales shipped ate compared with for initials of data control invoice, bill f lading, quantities billed (C6).. cletk (8). sales order, and Statements are sent to Observe whether monthly customer order (14). customers each month (C9). statements are sent (6).. Existing sales Shipping documents are Account for a sequence Trace selected shipping ‘transactions prenumbered and accounted —_ of shipping documents documents to the sales are recorded for weekly (C5). (10). journal to be sure that (completeness). Batch totals of quantities Examine file of batch totals ach one is included (11). shipped are compared with for initials of data control quantities billed (C6).. etk (8). Recorded sales are for Sales are supported by Examine sales invoice for Trace entries in sales the amount of goods authorized shipping supporting documents journal to sales invoices shipped and are documents and approved (13). (136). correctly billed and customer orders (C2). Recompute prices and recorded (accuracy). Batch totals of quantities Examine file of batch totals extensions on sales shipped are compared with for initials of data control invoices (13b). quantities biled (C6). etk (8). Trace details on sales Unit seling prices are Examine the approved invoices to obtained from the price price lst for accuracy and + shipping documents list master file of approved proper authorization (9). (130) prices (C7). + sales order (13d) Statements are sent to Observe whether monthly » customer order (13e) customers each month (C9). _ statements are sent (6) Sales transactions are Computer automatically posts Examine evidence that Trace selected sales correctly included transactions to the accounts accounts receivable invoices from the sales in the accounts receivable master file and master file is reconciled joumal to the accounts receivable master general ledger (C10), to the general ledger (7). receivable master file file and are correctly Accounts receivable master Examine evidence that and test for amount, summarized (posting _file is reconciled to the accounts receivable date, and invoice number and summarization). general ledger on a monthly master file is reconciled (13a). basis (Cll). to the general ledger (7). Use audit software to foot ‘Statements are sent to Observe whether monthly and cross-foot the sales customers each month (C9). statements are sent (6). joumal and trace totals to the general ledger (2). Sales transactions are Account classifications are Examine document Examine duplicate sales correctly classified internally verified (C8). package for internal invoice for proper (classification). Verification (13b). account classification (13b). Sales are recorded on Shipping documents are Account fora sequence —Thereisalack Compare date of recording the correct dates prenumbered and accounted of shipping documents of control to of sale in sales journal (timing). for weekly by the accountant (10), testfor timely with duplicate sales (C5). recording (D2). invoice and bill of lading (13b and 13¢).Recorded cash Accountantindependently Observe whether Review cash receipts journal receipts are forfunds reconciles bank account (C1). accountant reconciles and master fle for unusual actualy received bank account (3). transactions and amounts by the company Batch totals of cash receipts . (occurrence). ate compared with computer Examine file of batch totals Trace cash receipts entries summary reports (C4). for initials of data control from the cash receipts detk (). journal entries to the bank statement (19). Prepare a proof of cash receipts (18). Cash received is Prelisting of cash receipts is Observe prelisting of cash ——Prelisting of cash Obtain prelisting of cash recorded inthe cash prepared (C2). receipts (4). isnot used to receipts and trace receipts joumal Checks are restrctvely Observe endorsement of —verfyrecorded-——amountsto the cash (completeness). endorsed (C3). incoming checks (5). cashrecsipts receipts journal, testing (01). for names, amounts, and dates (15). Batch totals of cash receipts Examine file of batch totals ‘Compare the prelstng with ate compared with computer for initials of data control the duplicate depos slip summary reports (C4). detk (). (16). Statements are sent to Observe whether monthly customers each month (C5). _ statements are sent (6). Cash receipts are ‘Accountant independentty Observe whether Obtain prelisting of cash deposited and reconciles bank account (C1). accountant reconciles receipts and trace recorded at the bank account (3). amounts to the cash amounts received Batch totals of cash receipts Examine file of batch totals receipts journal, testing (accuraq)).. ‘ae compared with computer for initials of data control for names, amounts, and summary reports (C4). etk (8). dates (15). Statements ate sent to Observe whether monthly Prepare proof of cash customers each month (C5). statements ae sent (6). receipts (18). Cash receipts are Statements are sent to Observe whether monthly Trace selected entries from correctly included ‘customers each month (C5). statements are sent (6). the cash receipts journal in the accounts Computer automatically posts Examine evidence that to the accounts receivable receivable master transactions to the accounts accounts receivable master file and test for file and are correctly receivable master file and master file is reconciled to dates and amounts (20). ‘summarized (posting general ledger (CB) ‘general ledger (7). Trace selected credits from and summarization). Accounts receivable master file. Examine evidence that the accounts receivable is reconciled to the general accounts receivable master file to the cash ledger on a monthly basis master file is reconciled to receipts journal and test for ©. ‘general ledger (7). cates and amounts (21). Use audit software to foot and cross-foot the sales joumal and trace totals to the general ledger (2). ash receipts sh receipts transactions are Examine evidence of Examine prelisting transactions are internally verified (C6). internal vertcation (15). for proper account correctly classified classification (17). (classification). Cash receipts are Procedures require recording Observe unrecorded cash ‘Compare date of deposit recorded on the of cash on a daily basis (C7). ata point in time (4). per bank statement to the correct dates (timing). dats inthe cash receipts journal and prelitng of cash receipts (16).Recorded acquisitions are for goods and services received, consistent with the bes interests ofthe client (occurence). Purchase requisition, purchase order, receiving report, and vendor's invoice are attached to the voucher? Acquisitions are approved at the proper level Computer accepts entry of purchases oni fom authorized vendors in the vendor master fie. Examine documents in voucher package for existence. Examine indication of approval. Attempt to input transactions with valid and invalid vendors. Review the acquisitions journal, general ledge, and accounts payable maste fl for large ot unusual amounts Examine underlying documents for reasonableness and authenticity (vendors’ invoices, receiving reports, purchase orders, and purchase requsitions)* Documents are cancelled to Examine indication of Examine vendor master file for prevent their reuse. cancellation. unusual vendors. Vendors’ invoices, receiving Examine indication of internal Trace inventory acquisitions to reports, purchase orders, and verification. inventory master fie. purchase requisitions are Examine fixed assets acquired. internally verified * Existing acquisition Purchase orders are pre- Account for a sequence of ‘Trace fom a fle of receiving transactions are recorded numbered and accounted for. purchase orders. report othe acquisitions (completeness). Receiving reports are pre~ Account for a sequence of journals . numbered and accounted for" receiving reports. Tacefrom a feo! vendors! Vouchers are prenumbered and Account for a sequence of Paced acquisitions accounted for. vouchers. yuma Recorded acquisition Calculations and amounts are Examine indication of internal Compare recorded transactions transactions are accurate internally verified, verification, inthe acquisitions journal with (accuracy). Batch totals are compared with Examine file of batch totals. -—-—the vendor's invoice, receiving ‘computer summary reports. for initials of data control feport and other supporting clerk; compare totals to documentation.* summary reports, Recompute the clerical accuracy Arauicitinne ara annicaad for Evamina indication of on the vendor's invoice, Acquisition transactions Accounts payable master file Examine indication of internal Test clerical accuracy by footing are correctly included contents are intermally verified. verification. the journals and tracing postings inthe accounts payable Accounts payable master file Examine initials on general to general ledger and accounts and inventory master crtrial balance totals are ledger accounts indicating payable and inventory master files and are comecty compared with general ledger comparison, files. summarized (posting and balances, summarization), Acquisition transactions ‘An adequate chart of accounts ‘Examine procedures manual Compare classification with chart are correctly classified isused. and chart of accounts. of accounts by referring to (desstication. Account dassfations are Examine indication of internal Vendo invoices. internally verified. verification. Acquisition transactions are Procedures require recording Examine procedures manual Compare dates of receiving recorded on the correct dates transactions es soon as possible and observe whether unre- reports and vendors" invoices with (timing). after the goods and services have corded vendors’ invoices dates in the acquisition journal.* been received. exist. Dates are internally verified. Examine indication of internal verification.