Question 2 The following are common audit procedures for test of sales and collection cycle:...
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Accounting
Question 2 The following are common audit procedures for test of sales and collection cycle: 1. Trace selected sales involce numbers from the sales Journal to the bill of lading and test for customer name, date, product description and quantity 2. Discuss with the credit manager the likelihood of collecting older accounts. 3. Trace 30 accounts from the trial balance to accounts receivable master file to ensure the total is correctly added and agree Review the minutes of the board of directors' meetings and loan agreements for any indication of pledged or factored accounts receivable 5. Compare bad debt expenses as a percentage of gross sales with previous year. 6. Examine prelisting of cash receipts for indication of internal verification 4. Required: For each of the audit procedure above. i Identify whether each audit procedure is a test of control, substantive test of transaction, analytical procedure OR test of detail balances. State the audit objectives. . Identify relevant types of audit evidence. [Total: 9 Marks)
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