QUESTION 1

a. Optimum Pareto Analysis: can be utilized to determine the firm's issue. The registered
issue may have "large returns from its web portal," according to the graphic. The causes
will be listed on the chart, with a rating or score next to each one. Not every problem
will have a high score, and some minor issues may not be worth addressing at first.
Companies may address problems more effectively by devoting resources to high-impact
issues or those with higher scores, by focusing on issues that have a significant influence
on profitability, sales, or consumers.
b. Labor Productivity Index:
 It is a telling indication of numerous economic indicators since it provides a
dynamic gauge of an economy's economic growth, competitiveness, and living
standards. It is the measure of labor productivity (and everything that this
measure considers) that helps explain the main economic underpinnings
required for both economic growth and social progress.
 Labour productivity = volume measure of output / measure of input use

Capital Productivity Index:

 It demonstrates how effectively money is employed to produce production. It shows

the combined effects of labor input per unit of capital employed and multifactor
productivity (MFP), with the latter representing overall production efficiency.
Investment in information and communication technology (ICT) in particular enables
new technologies to enter the manufacturing process and is seen as a key driver of
economic growth.
 (Present Productivity / Base Period Productivity) x 100

Total Factor Productivity

 Productivity is the root determinant of competitiveness at the individual, company,

industry and country levels.
• TFP is the ratio between total output to total input which is one of the factors of
production other than capital and labor.

QUESTION 2

Internal control structure questionnaire

No. Questions Yes No

1. Is there a procedure manual for the department? X
2. What steps have been taken to ensure that established X
procedures have been implemented/followed?
3. Was the report you prepared used by someone? X
4. Is there a guide on how to use the manual for the report you X
are preparing?
5. Is there an organizational chart that defines each job position X
within the department?
6. Do related historical and projected financial data present X
accuracy, precision, and in a meaningful form?
7. Are there sufficient financial and statistical data to be used in X
conducting evaluations and assessments?
 8. Is the accrual accounting system used? X
9. Is there sufficient equipment in the department? X

QUESTION 3

a. Audit Program
Audit: PT. Sehat Drug Store
Location: Purwodadi
Date: June 15, 2021

Ste Audit Procedure Initial & W/P Ref.

p Date
I. OBJECTIVE OF THE REVIEW
1. Evaluation of compliance with corporate policies and
procedures
2. Evaluation of overall efficiency and effectiveness of
process internal controls and procedures.
3. Evaluation of processes and practices against known best
practices
II Audit Planning:
Planning:
a. Verify and test internal controls. Review reporting
methods and determine if taxes are paid on
appropriate categories of sales
b. Set up binder
c. Identify all sources of revenue
d. Develop project plan and determine scope
e. Prepare budget
f. Plan a coordination meeting with Process owner
g. Obtain Sales process/functional overview and
expense allocation
h. Prepare a schedule of detailed sales where tax
was not paid or supported by a valid
resale/exemption certificate.
i. Provide copies of invoices for review by the state
auditor
j. Identify extraordinary transactions.
k. Review transaction for taxability
l. Provide schedules, invoices and other supporting
documentations to the state auditor for review
and approval by (DATE).
4. Obtain a copy of the policies and procedures for Sales and
Revenue. Before commencing fieldwork, go through the
processes. Create a list of any questions that may be
asked during interviews and process mapping.
Review the following known best practices:
 Remove financial obstacles by providing clients with
several payment choices, variable billing periods,
and incentives to pay early.
 Establish a single point of contact for all incoming
payments-related client calls, and use technology to
 route calls to the appropriate service human or
automated activity.
 Ensure that all employees with customer contact
work together to deliver a consistent message to the
customer regarding company’s credit policies and
goals.
 Use credit scoring to assign the customer a credit
rating that will trigger appropriate sales and
collections treatment
 Constantly update clients' credit ratings utilizing a
behavioral scoring system that tracks customer
payment behavior, use activity, and overall customer
account exposure vs prescribed credit limits.
 Use the credit and collections process to enhance
customer satisfaction
 Develop, monitor, and motivate collections
specialists using individual and team performance
measures.
 Use performance measures to select and monitor
outside collection agents, if it is costjustified to
employ them
 Begin all treatment actions automatically based on a
pre-programmed, "customized" treatment timetable
that defines precise action stages for the first
identification of delinquent account customers
depending on customer credit rating/class.
 Prioritize delinquent accounts for collections follow-
up, assign appropriate collections personnel, and
give real-time access to client information..
5. Benchmark company sales process and statistics to other
similar companies (if applicable).
6. Based upon the interviews, gain an understanding of the
following areas:
 Overall sales and revenue process
 Customer credit rating system/scoring process
 Order entry process (High level review of sales’ role
in the order entry process)
 Process for monitoring of credit standings
 Reconciliation of shipped items to invoices; G/L
reconciliation
 Invoicing process
 Sales and revenue application process
 Process for collection of overdue amounts
 Management reporting (including process
performance metrics)
 Reserve process – (Coordinate with external auditors
to determine their process for review the company’s
reserve values to ensure that there is no duplication
of effort).
Make delinquent accounts a priority for collections
follow-up, assign suitable collections people, and provide
 real-time access to client information.
7. Obtain an understanding and evidence of the accounts
receivable/credit & collection process by performing the
following transaction testing:
 Review the company's sales trial balance for
unusual and/or large items and investigate, if
necessary. Items should be > 60 days and > 5% of
total sales balance
o Examine the specifics of major past-due
sums and consult with management.
Obtain and document the likelihood of
collectability and collection plans.
o Verify compliance with existing policies
and procedures.
o Ensure completeness of recording.
o Verify customer payments made.
o Verify accuracy of recording.
o Verify proper authorizations (if necessary)
 Select 10 – 20 cash receipts. Ensure that all
receipts are posted in a timely manner and
procedures are in compliance with established
policies and procedures.
 Select 10 – 20 taxability transactions. Ensure that
invoicing procedures occur in a timely manner are
in compliance with established policies and
procedures.
 Review credit ratings for 10 customers. Ensure
that credit classifications are in alignment with
scoring policies. Document all discrepancies.
 Obtain a list of all sales memoranda that have
been issued. Choose ten things and follow the
trail to the accompanying documents. Ensure that
they were issued and approved in line with
corporate policy and procedure
 Review sales reconciliation to G/L – verify
timeliness.
 Review sales reserved amounts – determine
method of calculations and verify reasonableness
Review/evaluate management reporting
reports/reconciliations (including budget to actual
commission expense, target earnings, quotas, etc.)
8. Obtain the following background information
 Number and rupiah value (absolute) of invoices
for the last six months – obtain soft copy of
information
 Current aging of the receivables – identify high
value invoices, credit notes, etc.
 Numeric sequence (search for duplicates &
missing invoices)
 Receivables by location
 Percentage of debit/credit memos by location
 Match billings to shipping reports for quantities shipped
but not billed; matching billing date to shipping date –
determine the time gap
9. Discuss findings with management prior to drafting audit
report
10. Draft final report in conjunction with process owner.
11. Distribute final report as prescribed by internal audit
distribution list
12. Schedule follow-up as appropriate.

b. Internal Control Questionnare Cash Receipts

No. Questions Yes No

1. For payments received by mail, is a mail log maintained by X
hand in ink to prevent alteration that lists the date of receipt,
amount of check, etc.?
2. Is the mail log prepared by someone independent of the cash X
receipts process?
3. Are checks stamped with a restrictive endorsement X
immediately upon receipt - by the cashier before putting the
check in the cash drawer or by the person opening the mail?
4. Is cash counted and verified when cashiers receive their X
drawers?
5. Is just one cashier allowed to access each cash drawer at any X
given time, ensuring that cash is always in the hands and
control of only one person?
6. Are cash drawers designated to a single individual and not X
shared across shifts or employees?
7. Is a receipt given for all transactions that are conducted in X
person - whether by cash register or pre-numbered receipt?
8. Are duplicate copies of receipts retained? X
9. Are manual receipts issued from a bound book that has X
prenumbered slips?
10. Are receipt books regularly reviewed for missing receipt X
numbers by someone other than a cashier?