The Following Are Audit Procedures in the Sales and Collection

question 91

Essay

The following are audit procedures in the sales and collection cycle.
1.Inspect a sample of shipping documents to determine if each has a sales invoice number included on it.
2.Discuss with the sales manager whether any sales allowances have been granted after the balance sheet date that may apply to the current period.
3.Add the columns on the aged trial balance and compare the total with the general ledger.
4.Observe whether the controller makes an independent comparison of the total in the general ledger with the trial balance of accounts receivable.
5.For the month of May,count the approximate number of shipping documents filed in the shipping department and compare the total with the number of sales invoices in the sales journal.
6.Compare the date on a sample of shipping documents throughout the year with related duplicate sales invoices and the accounts receivable master file.
7.Examine a sample of customer orders and see if each has a credit authorization.
8.Send letters directly to former customers whose accounts have been written off as uncollectible to determine if any have actually been paid.
9.Examine the master file of accounts receivable to see if each has an indication of "C" for a regular customer,"N" for interest-bearing receivables,and "R" for related parties.
10.Compare the date on a sample of shipping documents a few days before and after the balance sheet date with related sales journal transactions.
Required:
For each procedure,identify the type of evidence being used.For each procedure,identify either the transaction-related audit objective(s)being met or the balance-related audit objective(s)being met.

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Definitions:

Different City

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Plan Of Care

A detailed plan developed by healthcare professionals outlining the treatment and services a patient will receive to address their health needs.

Community Resources

The wide range of services, supports, and facilities available within a community that can be accessed to improve the well-being of its members.