Chapter 16 Completing the Tests in the Sales and Collection Cycle Accounts Receivable

1. Chapter 16 Completing the Tests in the Sales and Collection Cycle Accounts Receivable

2. The introduction … a new system for sales transactions had been implemented Susan’s substantive tests of transactions identified misstatements.

3. Analytical Procedures - Planning

4. Substantive Analytical - Planning

5. Ali what is the audit risk model ?

6. Audit Risk Model

7. Rodney what is the third standard of field work ?

8. 3rd standard of field work The auditor must obtain sufficient, appropriate audit evidence by performing audit procedures to afford a reasonable basis for an opinion regarding the financial statements under audit

9. Andrew K How does detection risk get reduced ?

10. Vincent define tolerable misstatement

11. Aida Which assertions relate to Account Balances?

12. Page 153

13. Lindsey Describe Vouching Describe Tracing

14. Fabiola If we are auditing assets are we most concerned with overstatement or understatement

15. Katie If we are auditing LIABILITIES are we most concerned with overstatement or understatement

16. Evan If we are auditing Revenues are we most concerned with overstatement or understatement

17. Andrew F If we are auditing EXPENSES are we most concerned with overstatement or understatement

18. Gavin If we are auditing Sales are we most concerned with Occurrence or Completeness

19. Nicholas M If we are auditing Accounts Receivable are we most concerned with Existence or Completeness

20. Erynn If we are auditing CASH are we most concerned with Existence or Completeness

21. Nathan If we are auditing Cash Receipts are we most concerned with Occurrence or Completeness

22. Tavian If we are auditing CASH DISBURSEMENTS are we most concerned with Occurrence or Completeness

23. Julian what are the three types of substantive tests?

24. Analytical Procedures - Substantive

25. aged trial balance page 379

27. Belen with which financial statement assertion might the aged trial balance be helpful ? Figure 3 page 379

28. Put it on the card p. 383 In the early 1990’s. Sears added more than 17 million credit card customers. However, many of these new customers were not good credit risks, and they tended to carry high balances. As a result in 1997, Sears had to increase its allowance for credit card delinquencies by 44%

31. Erin what are two forms of receivables confirmations ?

32. forms of receivables confirmations ? positive p 386 blank form negative p 387

35. Maintaining control of the confirmation process

36. alternate procedures --- p. 388 subsequent cash receipts Or Vouch from Acc Rec subsidiary ledger to Invoice to Shipping Doc to Sales Order to Customer Order or Purchase Order

37. Page 392 Valuation & allocation

38. Valuation & allocation

39. cut-off as of 12/31/2011

40. shipping documentssales (and receivables) cut-off at the loading dock

42. shipping documents goods shipped in 2011 2012

44. Mara do you want to audit the last 25 orders that were actually shipped prior to 12/31/11 or the first 25 orders that were shipped on January 1, 2012

45. Trevor will you Vouch or Trace ?

46. Connor what would the evidence indicate if you traced the first 25 shipments of 2012 into the 2012 Sales Jnl ?

47. shipping documents goods shipped in 2011 2012

49. Bryan what would the evidence indicate if you traced the first 25 shipments of 2012 into the 2011 Sales Journal?