Acca Aa Audit and Assurance: Control Activities
Acca Aa Audit and Assurance: Control Activities
Acca Aa Audit and Assurance: Control Activities
Control Activities
Kindly note that the content’s of this lecture support note is taken from BPP text
book. The purpose of this note is to provide my students with summary to
understand the control activities properly and it is not meant for any kind of
commercial purpose.
Sales system
• Sales are only recorded if there is an approved sales order form and shipping/
despatch documentation.
• The tasks of taking orders, recording sales and receiving payment are allocated to
three different staff members.
• Monthly customer statements sent out and customer queries and complaints
handled independently.
• Authorisation by senior staff required for changes in other customer data such as
address etc.
Purchase system
• Authorisation procedures and policies in place for ordering goods and services.
• The responsibility for placing the orders, recording the purchase order and making
the payment is carried out by three different staff members.
• Purchase orders raised for each purchase and authorised by appropriate senior
personnel.
• Only authorised staff can make electronic cash payments and issue cheques.
• Electronic cash payments and cheques prepared only after all source documents
have been independently approved.
• Reconciliation of electronic funds transfers and cheques issued with postings to cash
• Chart of accounts.
Cash receipts
• Separate responsibilities for the recording, receipt and reconciliation of cash.
• Daily remittance report reconciled daily with postings to cash receipts journal and
customer accounts.
• Chart of accounts (COA) in place and is regularly reviewed for appropriateness and
updated where necessary.
• Regular reconciliations carried out of payroll records and employee costs recorded
in the general ledger.
• Comparison of cheques and bank transfer list with payroll to ensure all employees
paid have been recorded via payroll.
• Preparation and authorisation of cheques and bank transfer lists.
• Reperformance of a sample of payroll benefit and deduction calculations.
• Agreement of gross earnings and total tax deducted with taxation returns.
• Changes to master payroll file verified through 'before and after' reports.
• All starters, leavers, changes to salaries and deductions are reported promptly to
payroll department and changes are updated in the payroll master file promptly.
• Chart of accounts.
• The non-current asset register should be reconciled regularly to the general ledger
and any differences investigated and resolved promptly.