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Janille Balderosa - Activity 8.25 PDF

The document provides an audit program for sales that identifies inherent and control risks as high with detection risk as low, requiring more extensive substantive testing. It lists audit procedures to test sales existence, occurrence, completeness, valuation, allocation, and presentation. It also identifies risks in sales such as wrong items invoiced and errors in posting. The document discusses incorporating a computer information system for sales to enhance effectiveness and efficiency through processing, classifying, and recording transactions. It recommends ways to mitigate risks in the CIS sales environment such as invoice checks against goods delivery notes and control account reconciliations.

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103 views2 pages

Janille Balderosa - Activity 8.25 PDF

The document provides an audit program for sales that identifies inherent and control risks as high with detection risk as low, requiring more extensive substantive testing. It lists audit procedures to test sales existence, occurrence, completeness, valuation, allocation, and presentation. It also identifies risks in sales such as wrong items invoiced and errors in posting. The document discusses incorporating a computer information system for sales to enhance effectiveness and efficiency through processing, classifying, and recording transactions. It recommends ways to mitigate risks in the CIS sales environment such as invoice checks against goods delivery notes and control account reconciliations.

Uploaded by

janille balderosa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Balderosa, Janille D.S.

BSA51KB2

1. Please prepare a Sales- Flowchart

2. Identify Audit program for sales

Audit program

SALES Risk Assessment

- To ensure that recorded sales represent goods Inherent Risk High


shipped during the period. Control risk High
- To ensure that all sales and other revenues Detection risk Low
represent all transactions occurred during the Substantive More Extensive
period and properly recorded. testing
- To ensure that sales are presented at financial
statements at appropriate amounts.

Audit Procedures Assertions Evidences


- Vouch entries in sales journal to supporting Existences Sales invoices
document of sales. Occurrence Sales Order
- Review applicable sales invoices and shipping Completeness Financial
documents to determine the accuracy and statements and
validity. footnotes
- Verify the sales invoices and check that all
customers name , product description and
quantities sold are properly mentioned and
recorded.
- Perform analytical procedures to determine Valuation
whether recorded sale balances appear Allocation
reasonable.
- Recalculate the percentage of customer
discount and returns
- Review financial statements whether sales are Presentation
properly recorded, classified and disclosed. and Disclosures

3. Identify the risk involve


1.Wrong items invoiced
2.Invoice does not add up
3.Delay in posting invoices
4.Errors in posting to Receivables ControlAccount

4.Incorporate an CIS for Sales Operation


Through the use of Computer Information System, the sale operations have been enhanced as
to its effectiveness and efficiency. The processing, classifying and recording transaction that are
previously complex in the manual system are being simplified by using different computer types
of any size. Proper authorizations of different documents and data files in the system. Proper
controls are used to protect and maintain the master file.

5.How to mitigate the risk involved in the CIS Sales environment?


1. Invoice checked against GDN
2. Random invoices arithmetic checked
3. Sequence checks on invoicing to ensure complete posting
4. Control Account reconciled on a regular basis to the Receivables Listing

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