NAMA : IRWAN ADIMAS GANDA SAPUTRA

NIM : 041714253011
NO ABSENT : 11
PROGRAM STUDI : MAGISTER AKUNTANSI
KELAS : MAKSI 2017 A
MATA KULIAH : AUDITING

DISCUSSION QUESTIONS AND PROBLEMS

12-21
A. The deficiencies in internal control for each of these situations, is:
1.
1.1 Supplying the receiving department with the purchase order is regarded as a
deficiency in that the department may be less careful in checking goods than they
would be if they were working without a record of the quantities that should be
received.
1.2 The failure to have the storekeeper receipt for the materials when they are sent to
him or her from the receiving department or to tie in the items placed in storage with
the acquisition constitutes a deficiency in control in that responsibility for shortages
cannot be conclusively placed on either receiving or stores. The receiving
department might, in collusion with a vendor, report receipts of materials that were
never received. Also, either the receiving department or the stores department might
fraudulently convert some of the materials and because of the lack of a record of
responsibility, the company would be unable to determine which department was
responsible.
2.
2.1 The payroll checks should not be returned to the computer department supervisor but
should be distributed by persons independent of those having a part in generating the
payroll data.
2.2 There is a lack of internal verification of the hours, rates, extensions or employees
by above.
3. The bank statement and cancelled checks should not be reconciled by the manager, but
should be sent by the bank directly to the home office, where the reconciliations should
be made against the manager's report of cash disbursements.
B. The type(s) of misstatement(s) that is (are) likely to result, is:
1.
1.1 This deficiency increases the likelihood of obsolete inventory and the possibility of
theft of shipments larger than the amount ordered.
1.2 The failure to isolate responsibility for shortages also increases the likelihood of
obsolescence in that employees are likely to be less concerned when they are not
 held accountable. Because the company cannot isolate responsibility, it might also
encourage receiving or stores to take goods.
2.
2.1 Padding of payroll with fictitious names and extracting the checks made out to such
names when they are returned after they have been signed.
2.2 There may be misstatements in hours, rates, extensions, and the existence of
nonworking employees.
3. The manager may draw checks to herself or others for personal purposes and omit them
from her list of cash disbursements or inflate other reported disbursement amounts.
C. I will improve internal controls for each of the three company, with:
1. Use a "blind" copy of the purchase order or a separate receiving report without a copy of
the purchase order. Use perpetual inventory records to hold the storekeeper accountable.
The storekeeper should also initial the receiving report or purchase order when he or she
receives the goods.
2.
2.1 Have the checks handed out by an independent person and not returned to Strode.
2.2 Internal verification of that information by Webber or someone else.
3. Have all bank statements sent directly to the home office and have Cooper report directly
to the home office by use of a list of cash disbursements and all supporting
documentation.
13-23

Audit Procedures From Different

No A B
Transaction Cycles
Trace a sample of shipping documents to Substantive Test
1 Complateness
entry in the sales journal Of Transactions
Examine a sample of warehouse removal
2 Test Of Control Existence
slips for signature of authorized official
Examine duplicate copy of shipping
3 documents for evidence that quantities Test Of Control Accurency
were verified before shipment
Select a sample of payroll checks and agree
4 Test Of Control Accurency
hours to employee time records
Use audit software to foot and cross-foot
Substantive Test Posting &
5 the sales journal and trace the balance to
Of Transactions Summaries
the general ledger
Examine voucher packges and related
Substantive Test
6 vendor invoice for evidence of approval of Classification
Of Transactions
account classification
Select a sample of sales invoince and agree Substantive Test
7 Accurency
price to the approved price list Of Transactions
Select a sample of entries in the cash
receipts journal and trace to posting in Substantive Test Posting &
8
individual customer accounts receivable Of Transactions Summaries
reords
 13-24

Audit Procedures From Different

No A B C D E F
Transaction Cycles
Examine vendor's statement for Substantive Test Of Detail
1 Purchasing Confirmation N/A Accurancy
accounts payable balance Test Of Balance
Examine a sample of customer orders Substantive
Test Of
2 for evidence of credit approval by Sales Inspection Test Of Classification N/A
Control
credit manager Transactions
Use audit software to foot the accounts
Substantive Test Of Detail
3 payable trial balance and compare the Purchasing Inspection N/A Accurancy
Test Of Balance
balance with the general ledger
Use audit software to foot and cross-
Sales and Substantive Test Of Detail Posting &
4 foot the cash sales journal and trace the Inspection N/A
Collection Test Of Balance Summaries
balance to the general ledger
Computer accounts receivable turnover Substantive
Sales and Analytical Substantive
5 for major customers and compare with Test Of Accurancy N/A
Collection Procedure Test
previous years Transactions
Inquire of the warehouse manager if Substantive
Inventory and Substantive
6 there is any consigned inventory in Inquiry Test Of Accurancy N/A
Warehousing Test
other locations Transactions
Confirm the amount of inventories Inventory and Substantive Test Of Detail
7 Confirmation N/A Existence
kept in public warehouse Warehousing Test Of Balance
Examine shipping documents before
and after the balance sheet date to
Substantive
determine whether sales tarnsactions Sales and Substantive
8 Inspection Test Of Cutoff N/A
are recorded in the proper period, Collection Test
Transactions
taking into consideration the shipping
terms and shipment dates
Perform test on the reasonableness of
salaries expense, taking into account Substantive Test Of Detail
9 Payroll Recalculation N/A Accurancy
salary increments and staff movement Test Of Balance
during teh year