For each of the following controls (you will be given 2 of the 6 below), describe

(1) The objective of the control.

(2) A specific procedure to test the operational effectiveness of the control.

(3) The financial misstatement that could result if the control isn't working.

(4) A specific substantive test of the related financial statement account and assertion.

a) The client prepares an aging of accounts receivable after each monthly close and follows up on old accounts.

b) Sales discounts by salesperson are analyzed monthly by the internal audit staff.

c) Accounting staff are instructed to date sales invoices using the shipping date per the shipping document.

d) Shipping documents are prenumbered, and accounting staff account for the numbers on a monthly basis.

e) Invoices are priced based on an authorized price list that is maintained in the accounting information system.

f) A report of all credits to accounts receivable for other than payments is generated monthly and reviewed by someone in the treasurer's office.

Answer rating: 100% (QA)

Answer1 Controlling is the vital a part of managerial process It is a tracking characteristic of ascertaining whether or not organisational efforts are heading in the direction of the said goals or no... View the full answer