ACCT 555 Week 6 HW KB Essay

Reviewing the trial balance for the entire year to see all transaction are accurately accounted for.

Transactions include Existence or Occurrence, Valuation and Allocation and Presentation and Disclosure. For this purpose, Arthur Young should have inspected the records and documents, inquired, recalculated, reperformed and used analytical procedures. The types of evidence that should have been collected includes Client’s shipping documents, client prepared accounts receivable aging schedule, vendor invoices, comparisons of current year amounts with those from the prior year and management prepared financial statements and

Some data entry steps may occur at any time during the accounting cycle, other transactions occur only during financial statement production. Each step consists of set of rules used to ensure the accuracy and conformity of financial statements to avoid illegal actions using inaccurate figures. Each type of report has a level of significance and use as each document provides differing information involving things such revenues, cash flows, and other transactions made within an

-Conduct a limit and range check to verify the accuracy of each customer’s account numbers.

There is a system of checks and balances in the respect that the sales order is verified upon receipt in the shipping department against the input information in the ERP system. If no match is found for the sales order, it is sent back to the Sales Department for correction. If the match is found, it is then verified for consistency of input into the system against the paper copy. If inconsistencies are present, the Sales Department is called. If the problem cannot be resolved, it is sent back to the Sales Department for correction. The matching restraints help to determine the validity and accuracy of the sales orders. The confirming of the sales order numbers for validity and contents for consistency and accuracy are strong prevention measures. A combination of individual department checks compiled with an ERP, which links all computers to the same reporting system, can show anomalies that may be indications of a problem (Duff, n.d.). By

Throughout the investigation it is evident that the business has adequate documentation of tax invoices which is the main document that certifies that a credit sale has taken place. These documents are important to ensure that the right amount of money is coming in through to the business so

[2]. If the amount confirmed differs from the account balance, the following should be done:

investigate items such as, long outstanding items, dishonored checks and significant adjustments in the subsequent month, and record adjustments as necessary (accuracy and existence/occurrence).

Authorization from the AP Department to disburse cash is not observed by the Cash Disbursement

2.7 A sales invoice will be issued by the supplier as a written record of transaction.

3) Observe that computer assigns a sequential number to purchase orders, receiving reports and checks and it tests the numerical accuracy of the vendors’ invoices.

Next, we can compare current trends of forex transactions with those of the previous years to determine their reasonableness. Our team can sample a few significant accounts with a higher risk of misstatement such as revenue, expenses or accounts receivable from the foreign subsidiary and check for the mathematical accuracy of documents and records. It can be also be used to verify the accuracy of the recording of transactions or of the application of accounting policies, for example by recalculating depreciation and accumulated depreciation of tangible assets.

b) Give the journal entries to record the Purchases, the Cost Goods Sold and the

They are updated in a timely manner so that all the user will have the information they need for their respective reports.

It runs on the main compliments such as accounts owing, expenditure, employee debt and account receivable.