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Sales | ACTG 410 - AUDITING, Quizzes of Auditing

James Madison University (JMU)Auditing

Class: ACTG 410 - AUDITING; Subject: Accounting; University: James Madison University; Term: Spring 2012;

Typology: Quizzes

2011/2012

Uploaded on 03/28/2012

pasoduf
pasoduf 🇺🇸

8 documents

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TERM 1
Sales: Substantive Procedures
DEFINITION 1
1. Perform cutoff tests for sales and shipping2. Scan sales
journal for large or unusual entries3. Vouch selected entries
to shipping documents4. Trace from shipping documents5.
Recompute information on invoices6. Analytical
proceduresPRIMARY CONCERN: Revenue Overstated /
Existence
TERM 2
1. Perform Cutoff Tests
DEFINITION 2
Existence - "Shift the Split" to 7 days after, 3 days
beforeCompleteness - Shift Split to 7 days before, 3 days
after. Not as importantConsider Shipping Terms
FOB Shipping Point - Title passes when on truck
FOB Destination - Title passes when goods unloaded
TERM 3
2. Scan sales journal
DEFINITION 3
Existence, Valuation primarilyCompleteness less likelyScan
for round numbers, trends and things that go against them.
Unusually large numbers
TERM 4
3. Vouch selected entries to shipping
documents
DEFINITION 4
Vouching sales = Existence, ValuationSales Entry -> Invoice -
> Shipping Document -> Sales Order
TERM 5
4. Trace from Shipping Documents
DEFINITION 5
Trace = Completeness, ValuationShipping document ->
Invoice -> Sales Entry
pf2

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TERM 1

Sales: Substantive Procedures

DEFINITION 1

  1. Perform cutoff tests for sales and shipping2. Scan sales journal for large or unusual entries3. Vouch selected entries to shipping documents4. Trace from shipping documents5. Recompute information on invoices6. Analytical proceduresPRIMARY CONCERN: Revenue Overstated / Existence TERM 2

1. Perform Cutoff Tests

DEFINITION 2 Existence - "Shift the Split" to 7 days after, 3 days beforeCompleteness - Shift Split to 7 days before, 3 days after. Not as importantConsider Shipping Terms FOB Shipping Point - Title passes when on truck FOB Destination - Title passes when goods unloaded TERM 3

2. Scan sales journal

DEFINITION 3 Existence, Valuation primarilyCompleteness less likelyScan for round numbers, trends and things that go against them. Unusually large numbers TERM 4

3. Vouch selected entries to shipping

documents

DEFINITION 4 Vouching sales = Existence, ValuationSales Entry -> Invoice -

Shipping Document -> Sales Order TERM 5

4. Trace from Shipping Documents

DEFINITION 5 Trace = Completeness, ValuationShipping document -> Invoice -> Sales Entry

TERM 6

5. Recompute invoices

DEFINITION 6 Determine if price is appropriate by multiplying quantity times price Valuation TERM 7

6. Analytical Procedures

DEFINITION 7 Existence. Valuation secondaryGo into as much detail as possible the first time (hotel example) Call the shot - use the prediction amount, not their number. Assume we are right. Document each attempt Possible to get it wrong and still think you are right Can have a lower bottom range if we are not concerned about completeness.