TUGAS PERTEMUAN 3

Oleh Nanda Rizki Nugraha 41801042, mahasiswi STEI SEBI

Disusun sebagai pemenuhan tugas mata kuliah Auditing II kelas AS2019C
Dengan dosen pengampu Bapak M. Razikun

MULTIPLE CHOICE OF QUESTIONS FROM CPA EXAMINATION

14-19 (OBJECTIVES 14-3, 14-5) The following questions deal with internal controls in the
sales and collection cycle. Choose the best response.
a. The accounting system will not post a sales transaction to the sales journal without a
valid bill of lading number. This control is most relevant to which transaction-related
objective for sales?
(1) Accuracy
(2) Occurrence
(3) Completeness
(4) Posting and summarization
b. The accounting system automatically obtains the unit price based on scans of bar
codes for merchandise sold. This control is most relevant to which transaction-related
objective for sales?
(1) Accuracy
(2) Occurrence
(3) Completeness
(4) Posting and summarization
c. Which of the following controls would be most effective in detecting a failure to
record cash received from customers paying on their accounts?
(1) A person in accounting reconciles the bank deposit to the cash receipts journal.
(2) Transactions recorded in the cash receipts journal are posted on a real-time basis
to the accounts receivable master file.
(3) Monthly statements are sent to customers and any discrepancies are resolved by
someone independent of cash handling and accounting.
(4) Deposits of cash received are made daily.
14-20 (OBJECTIVES 14-3, 14-6) For each of the following types of misstatements (parts a.
through c.), select the control that should have prevented the misstatement:
a. Which of the following controls most likely will be effective in offsetting the
tendency of sales personnel to maximize sales volume at the expense of high bad debt
write-offs?
(1) Employees responsible for authorizing sales and bad debt write-offs are denied
access to cash.
(2) Employees involved in the credit-granting function are separated from the sales
function.
(3) Shipping documents and sales invoices are matched by an employee who does not
have the authority to write off bad debts.
(4) Subsidiary accounts receivable records are reconciled to the control account by an
employee independent of the authorization of credit.
 b. A sales invoice for $5,200 was computed correctly but, by mistake, was entered as
$2,500 to the sales journal and posted to the accounts receivable master file. The
customer remitted only $2,500, the amount on his monthly statement.
(1) Sales invoice numbers, prices, discounts, extensions, and footings are
independently checked.
(2) The customers’ monthly statements are verified and mailed by a responsible
person other than the bookkeeper who prepared them.
(3) Prelistings and predetermined totals are used to control postings.
(4) Unauthorized remittance deductions made by customers or other matters in
dispute are investigated promptly by a person independent of the accounts
receivable function.
c. Shipments occurring in December 2016 did not get recorded until the first few days of
January 2017.
(1) The system automatically assigns bill of lading numbers and ensures no duplicates
are issued.
(2) As goods leave the shipping dock, the system generates a bill of lading and
associated sales invoice, which is automatically recorded in the sales journal.
(3) The accounting system requires entry of a valid bill of lading number provided by
the shipping department before a sales transaction is accepted for entry.
(4) The system prevents the creation of a bill of lading without a customer order dated
prior to the shipping date.
14-21 (OBJECTIVES 14-2, 14-3) The following questions deal with audit evidence for the
sales and collection cycle. Choose the best response.
a. An auditor is performing substantive tests of transactions for sales. One step is to
trace a sample of debit entries from the accounts receivable master file back to the
supporting duplicate sales invoices. What will the auditor intend to establish by this
step?
(1) Sales invoices represent existing sales.
(2) All sales have been recorded.
(3) All sales invoices have been correctly posted to customer accounts.
(4) Debit entries in the accounts receivable master file are correctly supported by
sales invoices.
b. Which audit procedure is most effective in testing credit sales for overstatement?
(1) Trace a sample of postings from the sales journal to the sales account in the
general ledger.
(2) Vouch a sample of recorded sales from the sales journal to shipping documents.
(3) Prepare an aging of accounts receivable.
(4) Trace a sample of initial sales orders to sales recorded in the sales journal.
c. To determine whether internal control relative to the revenue cycle of a wholesaling
entity is operating effectively in minimizing the failure to prepare sales invoices, an
auditor would most likely select a sample of transactions from the population
represented by the
(1) sales order file.
(2) customer order file.
(3) shipping document file.
(4) sales invoice file.
MULTIPLE CHOICE QUESTION FROM BECKER CPA EXAM
REVIEW
14-22 (OBJECTIVES 14-2, 14-3) The following questions deal with internal control and
audit evidence in the sales and collection cycle. Choose the best response.
a. Tracing shipping documents to sales invoices provides evidence that
(1) sales billed to customers were actually shipped.
(2) shipments to customers were properly invoiced.
(3) shipments to customers were recorded as sales.
(4) all goods ordered by customers were shipped.
b. Which of the following procedures most likely represents an internal control designed
to reduce the risk of errors in the billing process?
(1) Comparing control totals for shipping documents with corresponding totals for
sales invoices.
(2) Matching receiving documents with approved sales orders before invoice
preparation.
(3) Reconciling the control totals for sales invoices with the accounts receivable
subsidiary ledger.
(4) Requiring customers that purchase on account to be approved by the credit
department.
c. An auditor wishes to test the completeness assertion for sales. Which of the following
audit tests would most likely accomplish this objective?
(1) Select a sample of shipments occurring during the year and trace each one to
inclusion in the sales journal.
(2) Compare accounts receivable turnover (net credit sales/average gross receivables)
in the current year to that achieved in the prior year.
(3) Use common size analysis to compare recorded sales to sales recorded by other
companies in the same industry.
(4) Select large individual sales recorded during the year and review supporting
documentation.
DISCUSSION QUESTIONS AND PROBLEMS
14-23 (OBJECTIVES 14-2, 14-3, 14-4, 14-5) Items 1 through 9 are selected questions of the
type generally found in internal control questionnaires used by auditors to obtain an
understanding of internal control in the sales and collection cycle. In using the questionnaire
for a client, a “yes” response to a question indicates a possible internal control, whereas a
“no” indicates a potential deficiency.
1. Are customer orders evaluated for credit approval by someone independent of sales?
2. Is the bill of lading information forwarded in a timely fashion to accounting to ensure
recording in the sales journal?
3. Is the numerical sequence of bills of ladings accounted for to identify duplicates or
missing documents?
4. Are online sales automatically recorded in the sales system?
5. Are unit prices obtained from a preapproved and restricted master file of unit prices?
6. Are sales invoice amounts independently verified for correctness?
7. Are entries in the sales journal restricted to those that are supported by a valid bill of
lading?
8. Are entries in the sales journal timely recorded in the accounts receivable master file?
9. Are individuals responsible for handling cash collections independent of accounting
and shipping functions?
Required
a. For each of the preceding questions, state the transaction-related audit objectives
being fulfilled if the control is in effect.
b. For each control, list a test of control to test its effectiveness.
c. For each of the preceding questions, identify the nature of the potential financial
misstatements.
d. For each of the potential misstatements in part c., list a substantive audit procedure to
determine whether a material misstatement exists.
Answer
1. a. Recorded sales are for shipments actually made to non fictitious customers
(occurrence)
b. Examine customer order for evidence of credit approval
2. a. Existing sales transaction are recorded (completeness) and sales are recorded on the
correct dates (timing)
b. Account for a sequence of shipping documents
3. a. Recorded sales are for shipments actually made to non fictitious customers
(occurrence) and existing sales transaction are recorded (completeness)
b. Examine sales invoice for supporting bill of lading and customer order and account
for a sequence of shipping documents
4. a. Existing sales transaction are recorded (completeness)
b. Examine file of batch totals for initials of data control clerk
5. a. Recorded sales are for the amount of goods shipped and are correctly billed and
recorded (accuracy)
b. Examine the approved price list for accuracy and proper authorization
6. a. Recorded sales are for the amount of goods shipped and are correctly billed and
recorded (accuracy)
b. Examine sales invoice for supporting documents
 7. a. Recorded sales are for shipments actually made to non fictitious customers
(occurrence)
b. Examine sales invoice for supporting bill of lading and customer order
8. a. Sales transaction are correctly included in the accounts receivable master file and
are correctly summarized (posting and summarization)
b. Examine evidence that accounts receivable master file is reconciled to the general
ledger
9.
14-25 (OBJECTIVES 14-3, 14-4, 14-5) The following are commonly performed tests of
controls and substantive tests of transactions audit procedures in the sales and collection
cycle:
1. Review the prelisting of cash receipts to determine whether cash is prelisted daily.
2. Reconcile the recorded cash receipts on the prelisting with the cash receipts journal
and the bank statement for a one-month period.
3. Account for a sequence of shipping documents and examine each one to make sure
that a duplicate sales invoice is attached.
4. Account for a sequence of sales invoices and examine each one to make sure that a
duplicate copy of the shipping document is attached.
5. Compare the quantity and description of items on shipping documents with the related
duplicate sales invoices.
6. Trace recorded sales in the sales journal to the related accounts receivable master file
and compare the customer name, date, and amount for each one.
7. Examine sales returns for approval by an authorized official.
Required
a. Identify whether each audit procedure is a test of control or a substantive test of
transactions.
b. State which of the six transaction-related audit objectives each of the audit procedures
fulfills.
c. Identify the type of evidence used for each audit procedure, such as inspection and
observation.
Answer
1. a. Test of control
b. Existing sales transaction are recorded (completeness) and sales are recorded on
the correct dates (timing)
2.
3. a. Test of control
b. Existing sales transaction are recorded (completeness)
4. a. Test of control
b. Recorded sales are for shipments actually made to non fictitious customers
(occurrence)
5. a. Substantive test of transaction
b. Recorded sales are for the amount of goods shipped and are correctly billed and
recorded (accuracy)
6. a. Substantive test of transaction
b. Sales transaction are correctly included in the accounts receivable master file and
are correctly summarized (posting and summarization)
7.
14-26 (OBJECTIVES 14-3, 14-4) The following is a list of possible errors or fraud (1
through 8) involving sales and controls (a. through k.) that may prevent or detect the errors or
fraud:
Possible Errors or Fraud
1. Goods are removed from inventory for unauthorized orders.
2. Credit sales are made to customers with unsatisfactory credit ratings.
3. Invoices are sent to co-participants in a fraudulent scheme, and sales are recorded for
fictitious transactions.
4. Goods shipped to customers do not agree with goods ordered by customers.
5. Invoices are sent for shipped goods, but are not recorded in the sales journal.
6. Invoices are sent for shipped goods, and are recorded in the sales journal, but are not
posted to any customer accounts.
7. Invoices for goods sold are posted to incorrect customer accounts.
8. Invalid transactions granting credit for sales returns are recorded.
Internal Controls
a. Customer orders are compared with an approved customer list.
b. Sales orders are prepared for each customer order.
c. Shipping clerks compare goods received from warehouse with details on shipping
documents.
d. Prenumbered credit memos are used for granting credit for goods returned.
e. Goods returned for credit are approved by the supervisor of the sales department.
f. Approved sales orders are required for goods to be released from the warehouse.
g. Monthly statements are mailed to customers with outstanding balances.
h. Shipping clerks compare goods received from warehouse with approved sales orders.
i. Sales invoices are compared with shipping documents and approved customer orders
before invoices are mailed.
j. Control amounts posted to the accounts receivable ledger are compared with the
control totals of invoices.
k. Daily sales summaries are compared with control total of invoices.
Required For each error or fraud, select one internal control that if properly designed and
implemented, most likely would be effective in preventing or detecting the errors and fraud.
Each response in the list of controls may be used once, more than once, or not at all.*
Answer
1. F, K
2. A
3. C, H, I
4. C, H
5. K
6. G, J, K
7. E, G
8. E, G