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Chapter 16 Completing the Tests in the Sales and Collection Cycle Accounts Receivable

Chapter 16 Completing the Tests in the Sales and Collection Cycle Accounts Receivable. The introduction. … she discovered that a new real-time system for processing sales transactions had been implemented Susan’s substantive tests of transactions identified misstatements.

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Chapter 16 Completing the Tests in the Sales and Collection Cycle Accounts Receivable

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  1. Chapter 16 Completing the Tests in the Sales and Collection Cycle Accounts Receivable

  2. The introduction … she discovered that a new real-time system for processing sales transactions had been implemented Susan’s substantive tests of transactions identified misstatements.

  3. Analytical Procedures - Planning

  4. Substantive Analytical - Planning

  5. Diana What is the objective of AU-C section 500?

  6. AU-C 500Audit Evidence .04 The objective of the auditor is to design and perform audit procedures that enable the auditor to obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the auditor's opinion.

  7. Dani How does detection risk get reduced ?

  8. E. Reynolds what is the audit risk model ?

  9. Audit Risk Model

  10. Teresa pretend GAAS requires AAR ≤ .05 Controls are ineffective, we assess RoMM as MAX Which audit approach are we going to take ?

  11. Natalie pretend GAAS requires AAR ≤ .05 Controls are ineffective, we assess RoMM as MAX (1.00) We are taking the Primarily Substantive Approach What is the Planned Detection Risk ?

  12. Amy pretend GAAS requires AAR ≤ .05 Controls are effective, not great but Somewhat effective and we assess RoMM as 0.25 What is the Planned Detection Risk ?

  13. Kelsey W pretend GAAS requires AAR ≤ .05 Controls are effective, not great but somewhat effective and we assess RoMM as 0.25 Which audit approach will we take?

  14. Lindsey pretend GAAS requires AAR ≤ .05 Controls are effective, we assess RoMM as 0.03 Which audit approach will we take ?

  15. Susanna pretend GAAS requires AAR ≤ .05 Controls are effective, we assess RoMM as 0.03 We will take the Reduced Level of Control Risk Approach What is the Planned Detection Risk ?

  16. Tim Which assertions relate to Account Balances?

  17. Page 59

  18. Yuemei Describe Vouching Describe Tracing

  19. Paul If we are auditing assets are we most concerned with overstatement or understatement

  20. Suria If we are auditing LIABILITIES are we most concerned with overstatement or understatement

  21. Thuy If we are auditing Sales or Revenues are we most concerned with overstatement or understatement

  22. Kelly R If we are auditing EXPENSES are we most concerned with overstatement or understatement

  23. Shaina If we are auditing Accounts Receivable are we most concerned with Existence or Completeness

  24. Alvin If we are auditing Cash Receipts are we most concerned with Occurrence or Completeness

  25. Michael G If we are auditing CASH DISBURSEMENTS are we most concerned with Occurrence or Completeness

  26. Sumeet what are the three types of substantive tests?

  27. Analytical Procedures - Substantive

  28. aged trial balance page 285

  29. Derek with which financial statement assertion might the aged trial balance be helpful ? Figure 3 page 285

  30. Kelsey L which opinion do we issue while attempting to confirm the client’s accounts receivables – the client will not provide you the necessary information to confirm many of their largest customers

  31. Matthew what are two forms of receivables confirmations ?

  32. forms of receivables confirmations ? positive p 291 blank form negative p 291

  33. Maintaining control of the confirmation process

  34. alternative procedures --- p. 294 subsequent cash receipts Or Vouch from Acc Rec subsidiary ledger to Invoice to Shipping Doc to Sales Order to Customer Order or Purchase Order

  35. Page 298 Valuation & allocation Valuation & allocation

  36. Valuation & allocation

  37. Cash cut off 12-31-13

  38. Michelle Cash Receipts Journal Are you going to audit the last 25 entries in CR Jnl the prior to 12/31/13 or the first 25 entries in the CR Jnl after 1/1/14

  39. Bradley cash receipts - will you Vouch or Trace ?

  40. Brianna cash receipts other than cutoff with which financial statement assertion are we most concerned if we are auditing cash receipts?

  41. Brittney cash receipts Vouching the last 25 entries in the cash receipts journal prior to 12/31/13 ? Give an example of evidence that indicates the recorded balance is correct

  42. Javier cash receipts Vouching the last 25 entries in the cash receipts journal prior to 12/31/13 ? Give an example of evidence that indicates the recorded balance is overstated

  43. Steven Cash Disbursements Journal will you audit the last 25 entries in the CD Jnl prior to Dec. 31st or the first 25 entries in the CD Jnl after Jan 1st 2014

  44. Andrew cash disbursements with which financial statement assertion (other than cutoff) are we concerned if we are auditing cash disbursements ?

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