Question

You are responsible for performing substantive analytical procedures on services revenue for MD Cosmetics, a company that employees and provides administrative services (billing, collections, supplies purchasing, etc.) for a group of plastic surgeons in the Orange County area of California. MD Cosmetics is a public company and this is the third year your audit firm has performed the audit. You have recorded information on sales revenue, sales discounts (mostly for special promotions), cash, and accounts receivable. Others on your audit team have finished the audit of cash, accounts receivable, and payroll and have not found any major problems with either ICFR or accounts and disclosures. The results of the other audit work are available to you. You also have schedules related to operating room use time both in the doctor’s private offices and at hospitals, as well as information on the number and pay grades of support staff who participated in the scheduled surgeries. Although your firm has conducted the audit previously, in prior years sales have been audited only as the result of the accounts receivable and cash collections audit.
Draft the analytical procedures that you would include in the audit program for sales.



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  • CreatedJanuary 21, 2015
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