Control Objectives and Procedures Associations. 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). Make a copy of the exhibit page and complete the following requirements.

Exhibit 7.60.1

Required

a. Opposite the examples of transaction errors lettered a– g, write the name of the transaction assertion clients wish to achieve to prevent, detect, or correct the error.

b. Opposite each numbered control procedure, place an “X” in the column that identifies the error( s) the procedure is likely to control by prevention, detection, or correction.

Transcribed Image Text:

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