Samru Has Been Assigned the Sales Cycle as Part of an Audit

question 47

Essay

Samru has been assigned the sales cycle as part of an audit team.He will be evaluating several key controls in the sales cycle and conducting tests of detail for accounts receivable.Samru has been told to look at 15 customers with respect to the credit limit approval process (a test of control).Then,he has been told to use dual purpose tests for the rest of his testing.
Required:
Explain the relationship between tests of controls,dual purpose tests,and tests of details.

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Definitions:

Shareholder

An individual or entity that owns one or more shares of stock in a corporation, giving them certain rights and interests in the company.

Strict Liability

A legal doctrine that holds a party responsible for their actions without the need to prove fault or negligence.

Vicarious Liability

Vicarious Liability is a legal principle that holds one party responsible for the actions of another party, under certain conditions, such as an employer being liable for the actions of an employee.

Truck Driver

A professional operator of a truck or large vehicle, responsible for transporting goods and materials from one location to another.