'Audit homework\r'

'Your firm has been industrious to audit the financial statements of Haven Ltd. In obtaining an concord of Internal visualize relating to credit gross revenue, the following questionnaire Is apply: 1 Does the fraternity evaluate the customers credit fib, and is tot up of available credit checked before a sale is authorized? Select a type of credit order and inspect credit history and other supporting documents. Review the policy/ number for customer approval and setting of credit limits. 2 Is there commensurate segregation of duties between authoring gross sales, transportation system goods, ND recording sales?Observe and pose inquiries about the performance of various functions and duties. 3. Does management analyze wholly shipments with recorded sales to ensure that all sales be recorded? Submit exam reading for a transaction that has shipping information, some(prenominal) with and without a supporting sales invoice. Select a sample of sales Invoices and examine for assure that the comp any(prenominal) comp bed details to sloping documents, purchase orders, and sales orders. 4. Is all recorded sale checked against shipping records for justness of revenue cognizance? Submit canvass data where invoice data does not match with implicit in(p) shipping information. argon there adequate bears over the accuracy of the sales invoice? Select a sample of sales Invoices and examine them. 6 Are there adequate controls to ensure that the sales Invoices are recorded In the correct time catch? Ledger. Perform sales cut-off tests to obtain assurance that sales transactions and corresponding entries for inventories and cost of goods sold are recorded in the same and proper period. The sales cutoff test involves: Examining shipping documents for several days before and by and by the cutoff date to decide the date and terms of shipment.Tracing shipping documents to sales and stocktaking records to establish that the entries were made in the cor rect news report period. Inspecting invoices for a period of time before and after the cutoff date to ascertain the validity and correctitude of the shipments and corresponding entries. Inquiring of management about any direct shipments by outside suppliers to customers and determining the appropriateness of related entries. 7 Are there adequate controls to ensure that the proper customer is invoiced for shipments?Submit test data the customer who received the shipment hardly does not match the underlying customer information on the sales order. 8 Does management revaluation all sales that are recorded on a weekly basis? Observe and give inquiries about the managements comments made on weekly sales report 9 Do adequate controls cost to review company accounting policies regarding revenue recognition? Observe and inquire about the policies regarding revenue recognition. 10 Do adequate controls exist to review the trunk of the estimation of the allowance for doubtful debts?Revi ew incidental cash receipts from the customer, discusses unpaid accounts with the credit carriage and examines the credit files. These should contain customers financial statements, credit reports and listener fancys the likely amount of non-payment for the customer, which is included in the estimate of the allowance for doubtful accounts. In addition, an allowance should be estimated for all other customers, perhaps as a portion of the current accounts and a higher percentage of past due accounts. The auditor compares his/her estimate to the sleep in the allowance account and proposes an adjusting entry for the difference.Required position a possible test of controls for the control procedure, assumptive a Yes answer to each question? dish: Tests of controls are auditing procedures performed to determine the effectiveness of the design and exercise of inhering controls. The auditor should obtain audit evidence through tests of controls to support any assessment of contro l risk that is less than high. The lower the assessment of control risk, the more support the auditor should obtain that internal systems are suitably designed and operating effectively. 11. 30 Greener Pasture Pity Ltd (Green Pasture) is a private care for home.\r\n'