In order to establish an audit approach/strategy for sales, you begin with an evaluation of internal controls. Your audit testing of the internal control system for sales of Keller Ltd (Keller) has found a significant number of instances where large discounts have been given to certain customers without any authorization. Furthermore, the authorized price list has not been adhered to in many instances. The sales manager has indicated these changes to control procedures were required due to past difficulties in maintaining adequate sales levels.

Required:

1. Identify and justify the key assertion at risk in relation to Keller’s sales.
2. Based on the above, develop an appropriate audit approach for sales (in terms of the level of tests of controls / substantive analytical procedures / substantive tests of detail required) and justify your approach.

You may wish to set your answer out using the following template:

The key assertion at risk:
Justification:
Audit approach: (for below)	Choose Level (None, Small, Moderate, Extensive)
Test of controls
Substantive analytical procedures
Substantive tests of details
Justification of audit approach:

Answer rating: 100% (QA)

Answer a Key assertion at risk in relation to kellers sales Occurrence This assertion states that all transactions recorded disclosed in the books of accounts must have occurred during the accounting ... View the full answer