ACC 490 Week 4 LT Assignment Apollo Shoes Case Assignment 2015 version
- 1. ACC 490 Week 4 LT Assignment Apollo Shoes Case Assignment Link : http://uopexam.com/product/acc-490-week-4-lt-assignment-apollo-shoes-case- assignment/ Sample content Learning Team Assignment: Internal Control Audit – Apollo Shoes
- 2. ACC 490 Assertions and Questions Yes, No, N/A Comments Occurrence assertion: 1. Is the credit department independent of the sales department? Yes The salesclerks are in the marketing division and order requiring credit authorization is taken to the credit manager in the treasury division. 2. Are sales of the following types controlled by the same procedures described below? Sales to employees, COD sales, disposals of property, cash sales, and scrap sales. No The sales by various teams are handled differently as per organization policies and methods. 3. Is access to sales invoice blanks restricted? Yes Sales bills are locked up in the billing division and are taken out on an as-needed basis. 4. Are pre-numbered bills of lading or other shipping documents prepared or completed in the shipping department? Yes
- 3. The delivery division utilizes a pre-numbered Bill of Lading having 2 copies (one goes into the container and the other returns to accounts receivable together with the bill). Completeness assertion: 5. Are sales invoice blanks pre-numbered? Yes The empty sales bills are pre-numbered and the series is verified. 6. Is the sequence checked for missing invoices? Yes The numerical series is verified by an accounts receivable clerk with any lost bills accounted for and described. 7. Is the shipping document numerical sequence checked for missing bills of lading numbers? No No reference to this control. This might create stock to be misstated. Accuracy assertion: 8. Are all credit sales approved by the credit department prior to shipment? Yes All sales orders are authorized by a credit manager prior to further handling. 9. Are sales prices and terms based on approved standards? No Salesclerks write costs down (however are frequently incorrect because many checks have demonstrated) on a sales form, which is after that moved to a sales
- 4. bill. Therefore errors move from one division to another and are transferred to the client that makes a disparity in documented sales. 10. Are returned sales credits and other credits supported by documentation as to receipt, condition, and quantity, and approved by a responsible officer? No No understanding of this control. Higher probability of scam when no documentation is required nor authorization by a responsible official prior to accounts receivable posts a credit to a client account. 11. Are shipped quantities compared to invoice quantities? Yes Inventory storekeeper deletes inventory as per bill, delivery workers verify order prior to stuffing containers. 12. Are sales invoices checked for error in quantities, prices, extensions and footing, and freight allowances, and checked with customers’ orders? Yes The accounts receivable clerk verifies several parts of the bill while verifying numerical series. 13. Is there an overall check on arithmetic accuracy of period sales data by a statistical or product-line analysis? Yes The general ledger supervisor analyzes month to month sales bill batches with the accounts receivable control and sales income accounts. 14. Are periodic sales data reported directly to general ledger accounting independent of accounts receivable accounting? No
- 5. The general ledger supervisor reconciles account balances and verifies month to month sales groups however both are made by the accounts receivable division. This develops chance for scam since accounts receivable is involved in lots of parts of the deal cycle. Classification objective: 15. Does the accounting manual contain instructions for classifying sales? Yes Sales are documented by the accounts receivable division and coded into one of 3 product line income accounts. Cutoff objective: 16. Does the accounting manual contain instructions to date sales invoices on the shipment date? No Costs to accounts are to be made for the delivery date however no reference to sales bills being dated for delivery date. This enhances the possibilities of wrong entries to client accounts. Flowchart Revenue and Cash Receipts Cycle – Bridge Working Paper ICC Index # Control Activity Audit Implications Tests of Controls Compensating Audit Procedures S-1
- 6. Control on client order handling, incorporating defending of orders to avoid illegal modifications. Client orders are handled differently based upon the way of request (phone, mail, and so on.) and several people might have access to them prior to they are delivered to the credit manager. Observation to observe what the sales atmosphere is like when the division is hectic. Query to get info on client problems regarding orders. In case observation and inquiry indicate weak points, utilize sampling methods to get verification from clients regarding the happening and precision of orders. S-1 Separation of jobs for sales and credit checks. This separation exists, decreasing the likelihood of understating bad debts expenditure. Observation to observe the method utilized to verify customer credit and issue authorization. Ask and see to verify the uniformity of credit checks. Reperformance to ascertain in case the process utilized has flaws. Utilize sampling methods to check in case credit checks are carried out continuously when required and permission obtained for all sales. S-1 Overseeing of the correctness of sales estimations. The sales division makes estimations for clients that could have mistakes. In case understated, the bill might not be flagged as requiring credit authorization. Observation and reperformance to ascertain in case the method for making estimations is suitable. Inquiry to verify overseeing for precision by management. In case more research is required, utilize sampling ways to