Assertion and Related Control Activity - Revenue Transactions Flashcards
(18 cards)
Occurrence - Sales recorded only with approved customer order and shipping document.
Test a sample of sales invoices for the presence of authorized customer order and shipping document.
Occurrence - Accounting for numerical sequences of sales invoices.
Review and test client procedures for accounting for numerical sequence of sales invoices.
Occurrence - Monthly customer statements; complaints handled independently.
Review and testing of client procedures for mailing and handling complaints about monthly statements.
Completeness - Accounting for numerical sequences of shipping documents and sales invoices.
Review and test client’s procedures for accounting for numerical sequence of shipping documents and sales invoices.
Completeness - Shipping documents matched to sales invoices.
Tracing of a sample of shipping documents to their respective sales invoices and to the sales journal.
Completeness - Sales invoices reconciled to daily sales report.
Testing of a sample of daily reconciliations.
Completeness - An open-order file that is maintained currently and reviews periodically.
Examination of the open-order file for unfilled orders.
Authorization - Proper procedures for authorizing credit and shipment of goods.
Review of client’s procedures for granting credit. Examination of sales orders for evidence of proper credit approval.
Authorization - Authorized price list and specified terms of trade.
Comparison of prices and terms on sales invoices to authorized price list and terms of trade.
Accuracy - Authorized price list and specified terms of trade.
Comparison of prices and terms on sales invoices to authorized price list and terms of trade.
Accuracy - Each sales invoice agreed to shipping document and customer order for product type and quantity; mathematical accuracy of sales invoice verified.
Examination of sales invoice for evidence that client personnel verified mathematical accuracy. Recompilation of the information on a sample of sales invoices.
Accuracy - Sales invoices reconciles to daily sales report.
Examination of reconciliation of sales invoices to daily sales report.
Accuracy - Daily posting to sales journal reconciled with posting to subsidiary ledger
Examination of reconciliation of entries to sales journal with entries to subsidiary ledger.
Accuracy - Subsidiary ledger reconciled to general ledger control account
Review of reconciliation of subsidiary ledger to general ledger control account.
Cutoff - All shipping documents forwarded to the billing function daily.
Comparison of the dates on sales invoices with the dates of the relevant shipping documents.
Cutoff - Daily billing of goods shipped
Comparison of the dates on sales invoices with the dates they were recorded in the sales journal.
Classification - Chart of accounts
Review of sales journal and general ledger for proper classification
Classification - Proper codes for different types of products or services
Examination of sales invoices for proper classification.
