EBK AUDITING AND ASSURANCE SERVICES
16th Edition
ISBN: 9780134067117
Author: Hogan
Publisher: VST
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Question
Chapter 11, Problem 32C
a.
To determine
Identify the one or more existing controls for the given sales-transaction related management assertion.
b.
To determine
Identify the one or more existing controls for the given cash receipt-transaction related management assertion.
c.
To determine
Identify the deficiencies in internal control for sales and cash receipts.
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The following procedures were recently installed by The China Shop:a. All sales are rung up on the cash register, and a receipt is given to the customer. All sales are recorded on a record locked inside the cash register.b. Each cashier is assigned a separate cash register drawer to which no other cashier has access.c. At the end of a shift, each cashier counts the cash in his or her cash register, unlocks the cash register record, and compares the amount of cash with the amount on the record to determine cash shortages and overages.d. Checks received through the mail are given daily to the accounts receivable clerk for recording collections on account and for depositing in the bank.e. Vouchers and all supporting documents are perforated with a PAID designation after being paid by the treasurer.f. Disbursements are made from the petty cash fund only after a petty cash receipt has been completed and signed by the payee.g. The bank reconciliation is prepared by the cashier.
Instructions…
Following describes the credit sales procedures for clothing wholesaler that sells name-brand clothing to department stores and boutique dress shops. The company sells to both one-time and recurring customers. A flowchart of the system is provided in the figure labeled Problem 5: Internal Control. Customer orders are received by fax and e-mail in the sales department. The sales clerk, who works on commission, approves the credit sale, calculates com- missions and discounts, and records the sale in the sales journal from the PC in the sales department. The clerk then prepares a sales order, a customer invoice, and a packing slip, which are sent to the accounting department for processing. The accounting clerk updates the AR subsidiary ledger and sends an invoice to the customer. The clerk then forwards the sales order and packing slip to the warehouse- shipping department. The warehouse-shipping clerk picks the items from inventory and sends them and the packing slip to the carrier for…
When the store manager receives a requisition note, he issues three copies of purchase order. Two
copies of these orders are sent to the vendor and one copy remains in the stores file. When the
goods are received, the store manager matches the purchase order with the invoice and forwards
them to accounts payable department for payment of dues.
Which of the following statement best describes the internal control over the purchasing process?
Inadequate control over accounts payable.
Inadequate segregation of duties.
Inadequate segregation of duties.
Adequate internal control exists.
Chapter 11 Solutions
EBK AUDITING AND ASSURANCE SERVICES
Ch. 11 - Prob. 1RQCh. 11 - Prob. 2RQCh. 11 - Prob. 3RQCh. 11 - Prob. 4RQCh. 11 - Prob. 5RQCh. 11 - Prob. 6RQCh. 11 - Prob. 7RQCh. 11 - Prob. 8RQCh. 11 - Prob. 9RQCh. 11 - Prob. 10RQ
Ch. 11 - Prob. 11RQCh. 11 - Prob. 12RQCh. 11 - Prob. 13RQCh. 11 - Prob. 14RQCh. 11 - Prob. 15RQCh. 11 - Prob. 16RQCh. 11 - Prob. 17RQCh. 11 - Prob. 18RQCh. 11 - Prob. 19RQCh. 11 - Prob. 20.1MCQCh. 11 - Actions, policies, and procedures that reflect the...Ch. 11 - Prob. 20.3MCQCh. 11 - Prob. 21.1MCQCh. 11 - Prob. 21.2MCQCh. 11 - Prob. 21.3MCQCh. 11 - Which of the following correctly describes an...Ch. 11 - Prob. 22.2MCQCh. 11 - Prob. 22.3MCQCh. 11 - Following are descriptions of ten internal...Ch. 11 - Prob. 24DQPCh. 11 - The following are misstatements that have occurred...Ch. 11 - Prob. 26DQPCh. 11 - Prob. 27DQPCh. 11 - Prob. 28DQPCh. 11 - Prob. 29DQPCh. 11 - Prob. 30DQPCh. 11 - Prob. 32C
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