Develop the Audit Program – Revenues and COGS Ref.

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Client: ORION HANEL PICTURE TUBE CO LTD Audit date: 31 Dec 2002

Financial Statement Assertions

Audit Objectives: E/O C R& V/M P&D
O
 All sales included in the income statement represent the exchange of goods or  
services with customers for cash or other consideration during the period. All
other revenues included in the income statement for the period have accrued to
the entity at the balance sheet date. Revenues applicable to future periods have
been deferred.
 All sales and other revenues that accrued to the entity during the period are 
included in the income statement.
 Sales and other revenues are stated in the income statement at the appropriate 
amounts.
 Sales and other revenues are properly classified, described, and disclosed in the 
financial statements, including notes, in conformity with prescribed accounting
principles.

Assertions:
Existence or Occurrence, Completeness, Rights and Obligations, Valuation or Measurement, Presentation and Disclosure

Audit Procedures to Consider

Assertions Auditor
addressed Check if
by the item is W/P Sign-
procedure applicable Ref. Off
All 1. Obtain schedule of the COGS for the year and agreed total to            
G/L.
All 2. Review the fluctuation of COGS and gross margin by month and            
discuss with client on any significant fluctuation.
O, C, V 3. Assess the reasonableness of COGS for the period by:            
a) Average unit cost of FG uring the year and multiply with            
sales quantity
b) Compare the computed amount with client reported revenue            
c) Investigate any significant difference noted            
O, C, V 4. Compare the relationships of material cost, direct labor cost and            
overhead cost to COGS over the year. Investigate significant
fluctuations or the absence of expected fluctuations.
All 5. Check the reasonableness of allocation of depreciation charges            
and production wages and salaries into cost of goods sold for the
year.
All 6. Reconcile the COGS (as detail as possible) with stock opening,            
produced and closing balances

Date:

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E&Y SMALL BUSINESS DOCUMENTATION Prepared by:

SB-19l (12-00) Develop the Audit Program - Revenues Reviewed by: