Moses San Miguel

Assertions Existence and occurrence Audit Objectives: Substantiate the existence of receivables and the occurrence of revenue transactions. Prove none of the account receivables are fictitious. Completeness Audit objectives: Establish the completeness of receivables and revenue transactions. Rights and obligations Audit objectives: Determine the client has rights to the recorded receivables. Prove the accounts receivable are collectible in the normal course of business and are bona fide claims owe the company. Valuation or allocation Determine that the valuation of receivables and revenue is at appropriate net realizable values. Presentation and disclosure Audit objectives: Determine that the presentation and disclosure of receivables and revenue are adequate, including the separation of receivables into appropriate categories, adequate reporting of any receivables pledged as collateral, and disclosure of related party sales and receivables. Ensure the pledged accounts receivables or accounts receivables used as collateral are disclosed and receivables from directors, officers and affiliates are separately disclosed. From the internal control questionnaire of credit sales system, we have discovered some internal control weaknesses. Q1. Accounts receivable clerk has access to customer checks and cash prelist but the customer subsidiary ledgers should be maintained by a person who has no access to cash. Q2. All LAN reports and printouts are left unlocked and are accessible to anyone. Additionally, the cashier has access to the LAN accounts receivable application. However, unauthorized person should be unable to obtain access to customer accounts. Q6. Write-offs of bad debts are approved by Brenda Robertson, credit manager, who initials them. However, write-offs of bad debts should be approved by an official not associated with the