Exhibit 7.60.1 contains an arrangement of examples of transaction errors (lettered a– g) and a set of client control procedures and devices (numbered 1– 15).

Exhibit 7.60.1

Required: 

For each client control procedure numbered 1– 15, write a test of controls that could produce evidence on the question of whether the client’s control procedure has been implemented and is in operation.

Transcribed Image Text:

Sales recorded, goods not shipped Goods shipped, sales not recorded a. b. C. Goods shipped to a bad credit risk customer Sales billed at the wrong price or wrong quantity Product line A sales recorded as Product line B Failure to post charges to customers for sales d. е. f. g. January sales recorded in December CONTROL PROCEDURES 1. Sales order approved for credit 2. Prenumbered shipping doc prepared. sequence checked 3. Shipping document quantity compared to sales invoice 4. Prenumbered sales invoices, sequence checked 5. Sales invoice checked to sales order 6. Invoiced prices compared to approved price list 7. General ledger code checked for sales product lines 8. Sales dollar batch totals compared to sales journal 9. Periodic sales total compared to same period accounts receivable postings 10. Accountants have instructions to date sales on the date of shipment 11. Sales entry date compared to shipping doc date 12. Accounts receivable subsidiary totaled and reconciled to accounts receivable control account 13. Intercompany accounts reconciled with subsidiary company records 14. Credit files updated for customer payment history 15. Overdue customer accounts investigated for collection