Answered: What are six (6) transaction-related…

What are six (6) transaction-related audit objectives for sales? Give examples of tests of controls and substantive tests of transactions to achieve these objectives.

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter9: Auditing The Revenue Cycle

Section: Chapter Questions

Problem 23MCQ

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What are six (6) transaction-related audit
objectives for sales? Give examples of
tests of controls and substantive tests of
transactions to achieve these objectives.

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Indicate a specific audit procedure under each of the following categories, as applied particularly in the sales and collection cycle.a. test of controlb. substantive test of transactionsc. substantive test of account balances
, discuss the process of auditing the following:• Inventories• Revenues• Segment Reporting
What three types of authorizations are commonly used as internalcontrols for sales? For each authorization, state a substantive test that the auditor coulduse to verify whether the control was effective in preventing misstatements.
Describe the steps that auditors use to test controls over sales and collections. Please provide references if any.
State one test of control and one substantive test of transactions that the auditor can use to verify the following sales transaction-related audit objective: Recorded sales are stated at the proper amounts.
List the transaction-related audit objectives for the audit of salestransactions. For each objective, state one internal control that the client can use toreduce the likelihood of misstatements
Which assertion is most likely being tested when an auditor vouches transactions from the sales Journal to the sales orders? a. cutoff b. rights c. completeness d. accuracy
How many the specific audit tests for the Sales & Revenue Cycle?
A D REQUIRED: IDENTIFY THE ASSERTION[S] RELATED TO EACH AUDIT PROCEDURE ASSERTION[S] E= existence C=Completeness A=Accuracy Cl=Classification Cu=Cutoff V=Valuation RO=Rights & Procedure Obligations A Compare sales invoices with customer purchase orders В Compare selected items on the inventory list with the physical inventory.
Distinguish among tests of details of balances, tests of controls,and substantive tests of transactions for the sales and collection cycle. Explain how thetests of controls and substantive tests of transactions affect the tests of details of balances.
A system that traces the detailed transactions relating to any item in an accounting record could be define as an audit trail. Therefore, Tracing is used primarily to test which of the following assertions about classes of transactions? Select one: a. Valuation and Allocation. b. Accuracy. c. Existence. d. Completeness
An audit trail is a step-by-step record by which accounting data can be traced to its source. Therefore, Vouching is used primarily to test which of the following assertions about classes of transaction? Select one: a.Accuracy. b.Completeness. c. Cut-off d. Occurrence