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    Resume Audit of The Sales and Collection Cycle

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    Sully Kemala Octisari
    The document discusses the sales and collection cycle for auditing purposes. It describes the key accounts, functions, methodology for designing controls and substantive tests, audit tests for write-offs, additional internal controls over account balances, and the effect of test results. Specifically, it outlines the five classes of transactions in the cycle, five basic functions, steps to assess control risk and determine the extent of testing controls, transaction-related audit objectives for sales, usual steps to audit write-offs, and accounts most affected by cycle tests.

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    Resume Audit of The Sales and Collection Cycle

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    Sully Kemala Octisari
    210 views3 pages
    The document discusses the sales and collection cycle for auditing purposes. It describes the key accounts, functions, methodology for designing controls and substantive tests, audit tests for write-offs, additional internal controls over account balances, and the effect of test results. Specifically, it outlines the five classes of transactions in the cycle, five basic functions, steps to assess control risk and determine the extent of testing controls, transaction-related audit objectives for sales, usual steps to audit write-offs, and accounts most affected by cycle tests.

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    Resume Audit of the Sales and Collection Cycle

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    The document discusses the sales and collection cycle for auditing purposes. It describes the key accounts, functions, methodology for designing controls and substantive tests, audit tests for write-offs, additional internal controls over account balances, and the effect of test results. Specifically, it outlines the five classes of transactions in the cycle, five basic functions, steps to assess control risk and determine the extent of testing controls, transaction-related audit objectives for sales, usual steps to audit write-offs, and accounts most affected by cycle tests.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    210 views3 pages

    Resume Audit of The Sales and Collection Cycle

    Uploaded by

    Sully Kemala Octisari
    The document discusses the sales and collection cycle for auditing purposes. It describes the key accounts, functions, methodology for designing controls and substantive tests, audit tests for write-offs, additional internal controls over account balances, and the effect of test results. Specifically, it outlines the five classes of transactions in the cycle, five basic functions, steps to assess control risk and determine the extent of testing controls, transaction-related audit objectives for sales, usual steps to audit write-offs, and accounts most affected by cycle tests.

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    Sully Kemala Octisari C1L010017

    AUDITING II Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

    Account in Sales and Collection Cycle

    There are typically five classes of transactions included in the sales and collection cycle: sales, cash receipts, sales returns and allowances, charge-off of uncollectible accounts, and bad-debt expenses. Records include the customer master file and the transaction history file, with periodic listings such as sales journals and an aged accounts receivable trial balance. Business function in Sales and Collection Cycle

    There are five basic function in sales and collection,this is included Processing customer orders, Generating sales orders, Granting / checking credit, Shipping goods, and Billing customers and recording sales. Meanwhile, the document that used in sales and collection can be included Customer purchase order, Sales order, Credit application, Picking sheets, Shipping documents / bills of lading, Invoices & remittance advices, and Monthly statements. Methodology for Designing Controls and Substantive Tests

    Understand internal control. Study the clients flowcharts, prepare an internal control questionnaire, and perform walk-through tests of sales. Assess Planned Control Risk . There are four step that we must follow; Framework for assessing control risk, Identify key internal controls and deficiencies, Associate controls and deficiencies with the objectives, Assess control risk for each objective. Determine Extent of Testing Controls. This is can be Audits of public companies or Audits of nonpublic companies. Transaction-related Audit Objectives for Sales. This is included Occurrence, Completeness, Accuracy, Posting and summarization, Classification, and Timing. Audit Tests for the Write-Off of Uncollectible Accounts

    Usually following this step; Occurrence transaction-related audit objective, Proper authorization of the write-off of uncollectible accounts, and Verification of accounts written off. Additional Internal Controls Over Account Balances

    Realizable value, Credit approval, Aged accounts receivable trial balance, Writing off uncollectibles, Rights and obligations, and Presentation and disclosure. Effect of Results of Controls and Substantive Tests of Transactions

    The parts of the audit most affected by the tests for the sales and collection cycle are: Accounts receivable, Cash, Bad debt expense, and Allowance for doubtful accounts.

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