Suppose the following three audits are to be performed:

1. An audit of the notes collection department of a bank.

2. An audit of checkout counters for a grocery store chain.

3. An audit of security operations for a large warehousing operation.

The following is a brief explanation of each type of department:

The notes department of a bank is responsible for collecting all of the payments made by persons or businesses who owe monies on loans extended by the bank. This department has a record of all of the loans, the payment schedules, and the payment records for each one. The personnel in this department enter all customer transactions into the bank’s computerized accounting system. Weekly, monthly, and quarterly reports are made to management outlining the status of various accounts, highlighting past-due accounts with the associated amounts, reporting the number of new loans and their amounts, and summarizing the loans that have been retired.

Grocery store checkout counters total all of the individual purchases from the stores. A record of the purchase is kept inside the adding machine or the computerized checking , system, and a receipt is given to each customer. The cash at the end of each shift and at the end of the day is compared to the respective sales totals.

The security department for a warehouse is responsible for protecting the warehouse property and its contents. An alarm system links the warehouse with both the police department and the fire department. Also, hired guards tour the warehouse area and punch clocks located at various places throughout the property according to a predetermined schedule. If a guard fails to punch a clock within a certain time, an alarm automatically goes off. Some warehouses also have guard dogs for enclosed areas.

Required:

a. Would analytical review procedures be appropriate for each of the above audits? Explain.

b. Explain how an analytical review might be used in an audit of the checkout counters.