A. Test of Control or Substantive Test of Transactions| B. Transaction-related Audit Objective(s)| C. Substantive Test| Substantive Test of Transactions| Accuracy| N/A|
Substantive Test of Transactions| Posting and summarization| N?A| Test of Control| Accuracy| Compare unit selling prices on duplicate sales invoices to the approved price list.| Test of Control| Classification| Examine a sample of sales transactions to determine if each one is correctly classified in the sales journal.| Substantive Test of Transactions| Completeness, Accuracy, Timing, Posting, and summarization| N/A| Substantive Test of Transactions| Occurrence, Completeness, Accuracy, and Timing| N/A| Test of Control| Accuracy| Recalculate cash discounts for the sample of remittances to determine whether each one was consistent with company policies.| Test of Control| Completeness| Trace from the sample of remittance advices to the cash receipts journal in order to determine if related cash is recorded.|
Deficiency| Recommended Improvement|
Too much control over collections by the financial secretary.| The financial secretary’s responsibilities should be confined to record keeping.| Finance committee is not exercising its responsibility for collections.| The finance committee needs to take a more active supervisory role.| Finance committee has not performed the auditing functions.| There needs to be an audit committee appointed or they need to engage outside auditors.| One person should not have unsupervised control over cash until the amount has been properly recorded.| There needs to be two individuals counting the cash until it has been recorded.| The collection is vulnerable to theft while being counted and sitting in church safe.| Collections should be deposited after the count and the counts should be done by more than one person behind locked doors.| The head usher surrenders custody of the cash and the record of the count.| The financial secretary should receive a copy of the collection report for posting while the head usher retains a copy for use by the audit committee.| There is no assurance that amounts withheld by the financial secretary for expenditures will be properly accounted.| There should be a petty cash fund that is replenished through a check supported by approved reimbursement requests and support.| Members are asked to make their checks out to cash which is vulnerable to misappropriation.| Check should be made out to the church and they should be endorsed with “for deposit only.”| There is no mention of bonding| Key employees and members should be bonded if they are involved in the collection or disbursement of the church’s cash.| There are no written instructions for handling cash collections.| Detailed written instructions should be available for everyone involved in the handling of cash collections.| There is no envelope system for the cash collection.| Envelopes should be used so that the envelopes can be used as back up for the collection. |
A. Strength or Deficiency| B. Transaction related audit objective| C. Nature of deficiency| Strength| Occurrence of sales| N/A|
Deficiency| N/A| Receiving reports should be prepared by receiving clerks upon receipt of returned goods. A copy of the receiving report should be sent to the credit department for approval and to prepare a credit memo. The credit memo is sent to the accounting department to record the sales return.| Strength| Occurrence of sales, Accuracy of sales, Posting and summarization of sales, completeness of sales, accuracy of cash receipts, posting and summarization of cash receipts.| N/A| Deficiency| N/A| There is no appropriate segregation of duties. The controller has recordkeeping responsibilities. The write-offs should be approved by the credit department not the controller.| Strength|...