$$

Assertion

Auditing objectives

What could go wrong?

Mitigating controls

Data analysis auditing procedures

Data requirements

Accounts receivable $$ account balance

Existence

Amounts reported in the financial statements represent valid receivables.

An order is placed and a receivable is recorded without any product being shipped.

Debits to accounts receivable are only generated from the order entry system.

$$ Compare debits to accounts receivable against recorded sales.

$$ Review and test subsequent receipts.

$$ Evaluate proper segregation of duties by examining postings by source and preparer $($e$.$g$.,$ sales only entered by authorized salesclerk$).$

$$ Sales amounts

$$ Cash receipt amounts

$$ Customer names

$$ Transaction dates

$$ Transaction numbers

$$ General ledger postings by preparer and source $($e$.$g$.,$ order entry$)$

$$

$$

$$

A shipping number and FedEx identification number are entered into the system as evidence of order fulfillment and discrepancies are investigated.

$$ Verify that every sales transaction has a shipping number and FedEx identification number.

$$ Analyze gross margin percentage trends by month and by customer.

$$ Customer names

$$ Transaction numbers

$$ Shipping numbers

$$ FedEx ID numbers

$$ Sales amounts

$$ Cost of goods sold amounts

$$ Transaction dates

Completeness

$$

$$

$$

$$

$$

$$

Valuation and allocation

$$

$$

$$

$$

$$

Classification and understandability

$$

$$

$$

$$

$$

Sales $$ class of transactions

Occurrence

Amounts reported in the financial statements represent valid sales.

An order is placed and a sale is recorded without any product being shipped.

A shipping number and FedEx identification number are entered into the system as evidence of order fulfillment and discrepancies are investigated.

Verify that every sales transaction has a shipping number and FedEx identification number.

$$ Customer names

$$ Transaction numbers

$$ Shipping numbers

$$ FedEx ID numbers

$$ Sales amounts

Completeness

$$

$$

$$

$$

$$

Accuracy

$$

$$

$$

$$

$$

Cutoff

$$

$$

$$

$$

$$

Classification

$$

$$

$$

$$

$$