There should be safeguards to detect or prevent unauthorized entries to the system. It may not be necessary to confirm accounts receivable when: Estimated time - 15 minutes a. Computer check of information Use CAATs to test computer matching of included in the cash receipts journal information from cash receipts journal with with information from prelist.
This system eliminates the risk of diversion of the receipts by company employees and failure to record the receipts. The auditor should expand the scope of accounts receivable confirmations. Depositing receipts intact daily means that all receipts are deposited; that is, cash disbursements should not be made out of undeposited receipts.
Revenues for the 40 managed hotels will likely be related to management fees based on revenues earned for absentee owners. The positive form is used when detection risk is low or individual customer balances are relatively large.
Is cash deposited intact daily. By redirecting your social media traffic to your website, Scoop. Two analytical procedures that the auditor might use to estimate gross margin for company might include. It may be appropriate to allocate a proportionately larger share of tolerable misstatement to accounts receivable because of high risk of misstatements in this account and the high costs of applying certain procedures used in auditing receivables such as sending and processing confirmation requests.
Contributions should be deposited intact. Is an independent check made of agreement of amounts journalized with daily cash register summaries and validated deposit slips.
Control Test of Control Independent check of agreement of Inspect a sample of daily cash summaries and validated deposit slip with daily cash examine evidence of agreement with validated summary. How to curate as a team.
The bank picks up the mail daily, credits the company for the cash, and sends the remittance advices to the company for use in updating accounts receivable.
A random sample of other accounts may be selected. Written instructions for handling cash Because much of the work in cash Solutions Manual to Modern Auditing:. Chapter 9: Auditing The Revenue Cycle Saturday, November 3, PM Exam 2 Page 1 This preview has intentionally blurred sections.
Sign up to view the full version. Design and perform audit tests of cash and bank balances. 3. Recognize the possible fraud and errors of cash and bank balances. The assertions for auditing cash and bank balances are as follows: Assertions Descriptions 1. Existence To ensure that the.
cash is. actually. Chapter 14 Audit of Cash and Bank Balances Author: Personal.
Start studying Auditing the Revenue Cycle (Ch 9). Learn vocabulary, terms, and more with flashcards, games, and other study tools.
Search. In responding to identified risks of material misstatement in the revenue cycle, the auditor would never perform tests of controls, as only substantive procedures would be required Auditing Chapter 9. Chapter 14 – Auditing the Revenue Cycle Chapter Overview The Revenue Cycle.
Develop Audit Objectives. Inherent Risk. Including the Risk of Fraud • Management Misstatement of Revenue – Overstate revenues – Overstate cash and gross receivables – Understate allowance for doubtful accounts • Other Misstatement Factors.
12/9/ 3 Revenue Cycle Types of Risk • Compliance o Payer specific requirements for billing process o Risk in the event of pre- and post- payment review • Accuracy & Completeness o Charge capture o Technical billing requirements 5 // experience access Revenue. CHAPTER 14 AUDITING THE REVENUE CYCLE Learning Check a.
The revenue cycle includes the activities involved in the exchange of goods and services with customers and the realization of .Auditing the revenue cycle ch 14