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Audit Program apollo Shoes Audit

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Audit Program Apollo Shoes Audit

December 2, 2013

A Sales and Collection Cycle

Design test of controls -Examine Customer Files

-Examine Customer Orders

-Examine Sales Invoices, Bills of Lading, and Customer Orders for consistency

-Examine sales and credit procedures manual

-Examine customer orders for proof of customer approval

-Examine sales invoices for supporting bill of lading and customer orders

-Determine if monthly statements are sent to customers

-Examine credit procedures

-Examine tolerable misstatements in accounts receivables.

Substantive Test of Transactions -Review customer files for completeness.

-Review customer orders for customer approval and credit approval.

-Review customer orders for timing of approval, shipments, and payment.

-Review customer orders for authorized pricing.

-Review sales invoices for sequential nature

-Review sales journals and master files for unusual transactions, duplicate transactions and/or large transactions.

-Review sales journal and master file entries for connecting supporting documentation and trace those supporting documents.

-Check that customer statements are sent out monthly and verify their amounts.

-Trace selected sales invoices from the journal

-Test for amount, date, and invoice number

-Trace totals to the general ledger.

Analytical Procedures -Calculate the gross margin percentage and compare with prior accounting periods.

-Review sales over a period of 18 months to ensure consistency.

-Calculate the percentage completeness for open installment orders.

-Compute the receivables turnover ratio and compare with prior accounting periods.

-Calculate outstanding balances in relation to amounts already paid in comparison with prior years.

-Calculate the percent completeness for open installment orders.

-Compare bad debts with previous years

-Compare with previous years uncollectible accounts.

-Compare gross margin percentages with previous years.

B Payroll and Personnel Cycle

Design test of controls -Examine human resource files.

-Examine time records.

-Examine printouts of transactions rejected by the computer as having non-existent employee numbers.

-Examine payroll records for indication of approval.

-Examine file of batch totals for initials of data control clerk; compare totals to summary reports

-Examine procedures manual and observe when recording takes place.

Substantive

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