4A

Question 1

The auditor should trace a sample of shipping docs to the corresponding sales invoices, and to the sales journal and AR sub ledger. This is the audit procedures for*

Answer 1

completeness of sales transactions

Question 2

The auditor should compare a sample of sales invoice from shortly before/after YE with the shipment dates and with the dates the sales were recorded in the sales journal. This audit procedure is for

Answer 2

cut off for sales transactions

Question 3

Compare prices and terms n a sample of sales invoices with authorized price lists and terms of trade to determine whether sales are recorded at the appropriate amount. This audit procedure is for

Answer 3

valuation, allocation, and accuracy of sales transactions

Question 4

Vouch a sample of sales transactions from the sales journal to the sales invoice back to the customer order and shipping documents. This audit procedure is for

Answer 4

Existence and occurrence of sales transactions

Question 5

Examine a sample of sales invoices for proper classification into the appropriate revenue accounts

Answer 5

Understandability and classification of sales transactions

Question 6

The auditor should obtain an aged TB of AR and trace the total to the general ledger control account. This audit procedure is for

Answer 6

Completeness of AR

Question 7

The auditor should examine the results of confirmation and test the adequacy of the ADA. Review the A/R aging report. These audit procedures are for

Answer 7

VAA (valuation, allocation, and accuracy). the results of confirmations ( a test of accuracy). Test the adequacy of the ADA ( a test of valuation).

Question 8

What are the disclosures related to revenue cycle?

Answer 8

Revenue recognition methods
Revenue by reportable segment
Related party revenues and receivables
Receivables by type (trade, officer/employee, affiliates and terms
Pledged or discounted receivables
ADA related to the receivables and a discussion fo the analysis to assess credit risk
Inclusion in receivables of amounts related to L-T contracts

Question 9

Auditors should ensure that all required disclosures related to AR and sales have been included in the notes to the financial statements. This is the audit procedures for

Answer 9

Completeness of presentation and disclosures

Question 10

Difference between projection and forecast

Answer 10

Projection = Hypothetical assumptions *what if* (restricted)
Forecast = general use *the best of the responsible party's knowledge, the expected financial results (not restricted)