Kasus 18 32

May 18, 2018 | Author: image4all | Category: Accounts Payable, Debits And Credits, Cheque, Audit, Accounting
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18-32 (Objectives 18-2, 18-3, 18-4, 18-6) The following tests of controls and substantive tests of transactions audit procedures for acquisitions and cash disbursements are to be used in the audit of Ward Publishing Company. You concluded that internal control appears eective and a reduced assessed control risk is likely to be cost benecial. Ward!s active involvement in the business" good separation of duties" and a competent controller and other employees are factors aecting your opinion. Ward Publishing Company # Part $ %&ee page '() for Part $$" and Case *+,)- on pages '/'' for Part $$$0  Tests  T ests of Controls Controls and &ubstantive &ubstantive Tests of Transactions 1udit 1udit Procedures Procedures for 1cquisitions and Cash 2isbursements

*. 3oot and cross,foot the acquisitions and cash disbursements 4ournals for ) months and trace totals to postings in the general ledger. ledger. ). &can the acquisitions and cash disbursements 4ournals for all months and investigate any unusual entries. (. 5econcile cash disbursements per books to cash disbursements per bank statement for * month. 6. 78amine evidence that the bank reconciliation is prepared by the controller controller.. . $nquire and observe whether the accounts payable master m aster le balances are peri odically reconciled to vendors! statements by the controller controller.. '. 78amine the log book as evidence that the numerical sequence of checks is accounted for by someone independent of the preparation function. 9. $nquire and observe that checks are mailed by 2. Ward Ward or someone under his hi s supervision after he signs checks. -. 78amine initials indicating that the controller balances the accounts payable master le to the general ledger monthly monthly.. +. &elect a sample of entries in the cash disbursements 4ournal" and a. obtain related cancelled checks and compare comp are with entry for payee" date" and amount and e8amine signature endorsement. b. obtain vendors! invoices" receiving reports" and purchase orders" and %*0 determine that supporting documents are attached to vendors! invoices. %)0 determine that documents agree with the cash disbursements 4ournal. %(0 compare vendors! names" amounts" and dates with entries. %60 determine whether a discount was taken when appropriate. %0 e8amine vendors! invoices for initials indicating an independent review of  chart of account codings. %'0 e8amine reasonableness of cash disbursements and account codings. %90 review invoices for approval of acquisitions by Ward.

%-0 review purchase orders and:or purchase requisitions for proper approval. %+0 verify prices and recalculate footings and e8tensions on invoices. %*;0 compare quantities and descriptions on purchase orders" receiving reports" and vendors! invoices to the e8tent applicable. %**0 e8amine vendors! invoices and receiving reports to determine that the check numbers are included and the documents are marked es. &ee the footnotes to the sampling data sheet for further e8planations. 1 sampling data sheet using attributes sampling followsA

PJ1EE72 1?2$T $E$T$1J &1LPJ7 &$M7KK

27&C5$PT$HE H3 1TT5$I?T7 7ntry in C2 4ournal agrees with details on cancelled check.

7P75 ;@

T75 '@

151C5K *;@

+.b.%*0

1ll supporting documents attached to vendor!s invoice.

*@

@

*;@

99

+.b.%)0

2ocuments agree with disbursements.

;@

'@

*;@

(-

+.b.%(0

7ntry in C2 4ournal agrees with details on vendorNs invoice.

;@

'@

*;@

(-

+.b.%60

2iscount was taken as appropriate.

;@

'@

*;@

(-

+.b.%0

OendorNs invoice initialed.

*@

@

*;@

99

+.b.%'0

1ccount coding reasonable.

;@

'@

*;@

(-

*@

@

*;@

99

*@

@

*;@

99

+.a.

+.b.%90 +.b.%-0

Purchases approved by Ward. P.H. or P.5. properly approved.

(-

+.b.%+0

Prices" footings and e8tensions are correct.

;@

'@

*;@

(-

+.b.%*;0

2etails on supporting documents agree.

;@

'@

*;@

(-

+.b.%**0

2ocuments properly completed and cancelled upon payment.

*@

@

*;@

99

K 3or a nonstatistical sampling data sheet" 151C5 columns should indicate e chosen for each attribute should reect the 7P75" T75 and 151C5 for that attribute.

Part $$ a. 1ttributes sampling approachA The results portion of the sampling data sheet are as followsA

1TT5$I?T7 EH. +.a. +.b.

K K K

%*0 %)0 %(0 %60 %0 %'0 %90 %-0 %+0 %*;0 %**0

&1LPJ7 &$M7 ;

7QC7PT$HE& ;

7QC7PT$HE 51T7 ;

; ; ; ; ; ; ; ; ; ; ;

*K ; ; ; 'K (KK ; ; ; ; ;

)@ ; ; ; *)@ '@ ; ; ; ; ;

C?75 6.'@ 9.'@ 6.'@ 6.'@ 6.'@ over *[email protected] *)[email protected] 6.'@ 6.'@ 6.'@ 6.'@ 6.'@

Control deviations Lonetary misstatements

Eonstatistical approachA Iecause C?75 under nonstatistical sampling is estimated using auditor 4udgment" students! answers to this question will vary. They will most likely be similar to the C?75s calculated using attributes sampling. Iecause the &75 is >ero for attributes +.a." +.b.%)0,%60" and +.b.%90,%**0" it is unlikely that students will estimate C?75 greater than the T75 of @ %tests of controls0 or '@ %substantive tests of transactions0. 3or attribute +.b. %0 students should conclude that the results are not acceptable because the &75 of *)@ clearly e8ceeds the T75 of @. 3or attribute +.b.%'0" even though the &75 equals the T75 of '@" the results are not acceptable because sampling error must be considered in determining C?75. 3or attribute +.b.%*0" students! estimates of C?75 will be more variable since the &75 is only )@. &ome students will nd the results acceptable" and some will not" depending on their estimates of sampling error. b. 78ception * is not an e8ception" and has no eect on tests of details of accounts payable. 78ception ) is a control deviation. 7ven though it is not a monetary misstatement" controls require the presence of all supporting documents before a purchase and the related disbursement are processed. $f an invalid purchase is recorded" the liability and the related debited account may be overstated. $f an invalid disbursement is recorded" accounts payable may be inappropriately reduced.  Thus" misstatements in the occurrence of those transactions could actually result in both overstatements and understatements of accounts payable.  Tests for occurrence include tracing items on the accounts payable listing

to supporting documents and conrmation of accounts payable and reconciliation to vendorNs statements. 78ception ( is a control deviation where one,half of those items also contain monetary misstatements. Lisclassication is a serious misstatement. Fowever" it relates to the de bit entry" not the credit to accounts payable. Tests supporting charges to assets and e8pense accounts will need to be increased" but tests of accounts payable will probably not be aected. c. Hn the following page is an audit program for accounts payable. The balance,related audit ob4ectives tested by each procedure are indicated. Iecause the appropriate audit risk for accounts payable is high and inherent risk is low" and because analytical review procedures were e8cellent" detailed tests should be held to a minimum. The e8ception to this is for procedure (D this has not been reduced because of the e8ception in procedure +.b.%*0

I1J1EC7,57J1T72 1?2$T HIR7CT$O7& 2  e t   a i   l   t  i    e ,i   n

*. Hbtain list of accounts payable. 3oot the list and agree to general ledger.

7  8 i    s  t   e n  c   e

Q

(. Hbtain vendorNs statements for ); vendors with greatest volume of purchases" plus *; others" by conrmation. 5econcile statements to accounts payable list.

Q

. 5eview the list of accounts payable for proper classication of accounts due to related parties" debit balances" or items with unusual terms.

1   c   c   u r   a  c   y

 C   C  l    u  a t   s   o  s  f  i      c   a t  i    o n

Q

). Trace all items on the list over S*;";;; to vendorNs invoice and supporting documents.

6. 78amine all subsequent period disbursements and payments in process of amounts over S";;; to determine if they were recorded in the proper period.

 C   o m  p l    e t   e n  e  s   s 

Q

Q

Q

Q

Q

Q

Q

EoteA 5ights and 5eali>able value are not applicable to accounts payable. Eo audit work was considered necessary for obligations

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