Case 5 2

3. Substantive tests procedures: The audit team should perform substantive tests on Smackey’s accounting transactions and

First, we conducted risk-based approach with data analysis techniques-unusual invoice and unusual comments, to identify the unusual items that are in the accounts receivable detailed listing, and tested whether there are invoices outside the expected range of invoice number and “special” comments associated with accounts receivable items. As a result, there were no invoice number out of range, and Invoice 1000919, 1000845, 1001097 are “special” comments associated with accounts receivable.

* Tests done are questioning management about procedures for determining uncollectible amounts and reviewing amounts

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.

5. No because the amount of the invoice fluctuates for the same product in this type of scheme and therefore it would be difficult to figure out how much the invoice should have been made out for.

Sales invoices are prepared in batches on a daily basis using numbered sales invoices. Sales invoice numbers are automatically generated by the company’s computer system. The accounts receivable clerk does not have appropriate computer rights to override the computer-generated invoice number. Upon preparing sales invoices, the accounts receivable clerk verifies that the first invoice number of the batch is consistent with the last invoice number of the previous batch. Inconsistencies or skipped sales invoice numbers are investigated and resolved before new sales invoices are prepared. The items shipped are compared to the items billed for proper quantity, price, and other sales order terms.

There are several red flags in the invoices. There are several invoice numbers that are repeated and have an A at the end of the repeated invoice.

19. Receipts must be written for each amount received but they may be retained in the receipt book unless the payment is made in cash or the payer requests the receipt be given to them

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate (Louwers & Reynolds, 2007). We believe that the audit evidence obtained is sufficient and appropriate to provide a reasonable basis for our opinions.

The company accounts for these transactions as sales in accordance with Statement of Financial Accounting Standards No. 77, ‘’Reporting

This paper contains the summary of the details and results of the audit tests on

Trace items returned to the receiving report, taking note of quantity and date received (S‑4).

This program allows users to manually post invoices for payment using a physical copy of them. I typically paid all storage and transportation invoices received in the mail using MIRO because the physical copy was already present. When posting invoices in MIRO, there is already a format that is set and I type in the necessary information for the processing of the invoice. I type in the invoice number, invoice date, amount, and work order number. After entering the work order number, the work order amounts created by an operations employee will appear as well as the vendor information. The amounts on this work order indicate the money on the account and the amount that Hapag-Lloyd agreed to pay the vendor and for which container. I use this feature to ensure that what the company agreed to pay matches the amount that is billed on the invoice. Occasionally, some work orders numbers have money for multiple invoices. If this is the case, I click on the work order item with the container number and amount that matches the invoice to

To determine whether or not an invoiced amount was only paid once to any given vendor, we first imported the Vendor Master data into ACL. We then ran a duplicates analysis focusing on four main categories: document number, invoice number, payment amount, and vendor name. Sorting by these categories allows us to determine if the duplicate the software identified was actually a duplicate. We then exported the data into excel and analyzed every duplicate.

Oftentimes, auditors look at the financial measures as the basis in detecting the likelihood of fraud in the firms being audited. This strategy has been proven to be effective most of the time. Financial measures primarily are the core features that firms and outside parties (e.g.,