Acc 403 Week 8 Homework
Chapter 14: Problems
14-28(a-c)
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. |
14-30 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
14-28(a-c)
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. |
14-30 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