Audit Program Design Part Ii

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

* Documents used: customer order, sales order, shipping document, sales invoice, sales journal, remittance advice, bank deposit list, cash receipts jornal, credit memo, sales return and allowance journal, uncollectable account authorization form, a/r master file, a/r trail balance, monthly statement

This control is directly related to the accuracy transaction-related audit objective for sales. The auditor might test the effectiveness of this control by examining a sample of duplicate sales invoices for the clerk’s initials indicating that the unit selling price was verified.

Planning and developing audit methodologies for Financial & Operating Audits such as contracts and Procurements, accounts payable, inventory management, petrochemicals co-ordination, Fixed Assets, Budgeting, & Financial resource management.

A computer program prints a daily report of all shipments that have not yet been billed to customers.

Analytical procedures should be applied to the determination of commission that is being paid to Smackey salespeople. The commissions on the average are off by 11 percent showing that they may not be reasonable. The auditors also need to perform the analytical procedures for inventory to determine if the inventory is being misstated. This would be a concern due to the amount of waste and returns. The test of details of balances will need to be done on the accounts receivables to determine if they are properly stated.

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The aim of this report is to develop an audit plan using the 2007/2008 annual reports of the WesFarmers. This report will provide an understanding of the underlying concepts of an overall audit strategy. This strategy will bring forward the direction and scope of the WesfFarmers audit plan. This report will address five major points these are as follows:

The overall process of recording and processing financial events in a business is known as the accounting cycle. The collective process includes ten different steps that begin with analyzing and recording transactions and ending with post-closing and trial balance is prepared. Through this paper it will be explained all the steps with examples of how the steps are implemented in real life business situations.

The total listed on the sales invoice should agree with the total on the sales invoice slip. In addition, evidence should be present to indicate that a Lakeside employee has already made this same

“Remit_Num = 0” and then getting the total amount due. By doing this, only those sales which do not yet have a

d. Trace the date, check number, and amount of outstanding item – Occurrence & Completeness. (AU-C 315.A114 a.i-ii)

• Directing appropriate attention to the different areas of the audit such as assessing materiality, so that when the detailed audit plan is prepared, audit procedures can be directed towards the material amounts.

The personnel and payroll cycle includes the hiring of employees, recording hours worked, withholding and, recording of taxes, distributing payment for work performed, and properly documenting the termination of employees. Payroll can be a significant expense for a company and without proper internal controls can be vulnerable to fraud. Some common types of the fraud within the payroll cycle consist of ghost employees, claiming unworked hours, and pay rate alteration. The objective of a payroll audit is to determine if the current balances in the audit period are fairly stated and in accordance with accounting principles. According Arens, Elder, and Beasley, “Tests of controls and substantive tests of transactions procedures are the most important means of verifying account balances in the payroll and personnel cycle” (2012, p. 664). An

| * David should keep a straightforward and honest relationship with MAL. * David integrity will be compromised if these errors are discovered.