Since you are unable to follow up directly with client personnel, you may need to rely on some evidence with which you may be uncomfortable. Improperly capitalizing inventory and startup costs scheme are used by fraudsters in order to meet budget requirements.
Verify the propriety of inventory flow. Will you need any staff help from us? Perform cutoff tests for purchases, sales, purchase returns, and sales returns. In order to perform the tax work, Sarbanes-Oxley requires that we get prior approval from the audit committee to perform both the tax work as well as the audit.
Do not discuss the procedures for cash disbursements and cash balances. Vouch and test inventory pricing. The strength of our results for the past year should not be confused with the truth of the times. Page 34 Apollo Shoes Inc.
I am proud of their responses. Trace postings from the cash receipts journal to the general ledger. At the discretion of the director of internal audit, internal auditors will occasionally make unannounced reviews of the bank account reconciliations. I know that everyone has a particular style of workpaper formatting, but my preference is for the following columns for the income statement and balance sheet: Substantive Tests for Fixed Assets A.
Although we have not worked on an engagement together before, I have heard many good things about you. Verify the quality of inventory items. Lastly, while it is difficult for us to believe that not everyone enjoys auditing as much as we do, we have tried to make the case both interesting and enjoyable in an usuaual sort of way.
Personnel use the duplicate deposit slips retained when bank deposits were made, the cash receipts journal listing, and the cash disbursements listing to reconcile the general bank accounts. Assume adequate controls exists to assure that all sales transactions are recorded.
However, there can be no assurance that the Company can successfully expand its operations, or that such expansion will prove profitable.Each Audit Team will perform the following task (not all inclusive) of Planning; Internal Control Evaluation; Substantive Testing of Cash, Accounts Receivable, Inventory, Prepaids, Fixed Assets, Liabilities and Payroll as well as render an audit opinion thereon in completing the audit of Apollo Shoes, Inc.
Prepare justifications for substantive procedures by using the Apollo Shoes Casebook for detecting irregularities in each of the following audit cycles for accounts receivable. Audit Program Design Part Ii Audit Program Design Part II Audit Program Design Part II The audit program design introduces the concepts of (a) Adequate designed tests of controls, substantive tests of transactions, and analytical procedures for the Apollo Shoes sales and collection cycles, (b) Adequate designed tests of controls, substantive tests.
Design tests of controls, substantive tests of transactions, and analytical procedures for the Cash Cycle at Apollo. Audit Program Design: Cash Cycle at Apollo Shoes. Accordingly, the auditor may decide to decrease the amount of substantive testing, omit certain procedures, and/or schedule interim testing.
Conversely, weak internal control will likely result in increased substantive testing, the need for additional audit procedures, and/or scheduling testing at or after year-end.
Tasks are listed in the attached word documentCase Study “Audit of Apollo Shoes, Inc.”Each Audit Team will perform the following task (not all inclusive) of Planning; Internal Control Evaluation; Substantive Testing of Cash, Accounts Receivable, Inventory, Prepaids, Fixed Assets, Liabilities and Payroll as well as render an audit opinion thereon in completing the audit of Apollo Shoes.Download