NEGROS ORIENTAL STATE UNIVERSITY 

COLLEGE OF BUSINESS ADMINISTRATION 

Main Campus I, Dumaguete City  

Accy 301 Auditing and Assurance Concepts and Application 

Assignment # 3 
November 10, 2021 

Name: Farah Icao Section: ACCY -B

Exercise 1.

1. A. Accounting for shipping documents to determine that all shipments are billed.
B. Observe procedure and, for example of shipping documents, examine sales invoices.
C. Completeness

2. A. Prelisting of cash receipts and cash register procedure are monitored.

B. Compare deposits to each cash register and total and prelisting.
C. Completeness

3. A. A monthly statement should be mailed to customers by someone not involved in handling

accounts receivable cash.
B. Observe procedure and examine follow-up files.
C. Existence or occurrence

4. A. For goods shipped, goods should be counted and descriptions and quantities should be
compared to quantities and descriptions on sales order and shipping documents prior to
shipping.
B. Observe procedure. For example, examine signature on documents evidencing performance.
C. Rights and obligations

5. A. Accounting for all sales invoice numbers to ensure all are recorded.
B. Observe procedure. For a sequence of invoices, account for the numerical sequence.
C. Completeness

6. A. Shipping documents should be accounted for to determine that all items shipped are billed.
B. Observe procedures. Examine invoices for a sample of shipping documents.
C. Completeness

7. A. For goods shipped, goods should be counted and descriptions and quantities should be
compared to quantities and descriptions on sales orders and shipping documents prior to
shipping.
B. Observe procedure. For a sample, examine signature on documents evidencing performance.
C. Right and obligations
8. A. Prenumbered sales invoices should be used and accounted for to determine that all sales are
recorded (in the proper period).
B. Observe procedure. Examine entries for a sequence of sales invoices in sales journal.
C. Completeness

Exercise 2.
1. A. Existence, completeness
B. Cash may be misappropriated of lapping my occur.
C. Observe separation of duties and inquire of personnel about their responsibilities.

2. A. Existence, completeness
B. Fictitious cash receipts may be recorded or cash receipts may be misappropriated
C. Observe whether a prelisting is prepared and inquire of preparer about the procedures
followed.

3. A. Existence, completeness
B. Cash may be unrecorded or misappropriated.
C. Observe the procedure and inquire of personnel who perform the procedure.

4. A. Existence
B. Bank reconciliations may be hide shortages.
C. Examine bank reconciliations and determine that preparer does not have conflicting
interests.

5. A. Valuation
B. A customer may take a larger discount that’s appropriate.
C. For a sample of entries in the cash receipts journal, examine remittance advices for
approval of discounts taken.

6. A. Existence
B. A validated deposit ticket is obtained for daily deposits and compared to the cash receipts
summary.
C. For a sample of entries in cash receipts journal, reconcile the total to validated deposit
tickets.