Only work on #6a to h

Please only reference with Ref. #. Don't give me the names of the account.

Please answer the question the way you see it in the excel. The same format you see.

You do not need to put any initials there. Just put the reference number from the workpaper.

Use this excel link provided

Excel link:

https://docs.google.com/spreadsheets/d/1xtFEBFJxN6buakz5jrNrwNlLBE1wfxcp/edit?usp=sharing&ouid=108523303290885083995&rtpof=true&sd=true

PRELIMINARY WORK

Assume that you are beginning the substantive audit procedures for the Storage Sheds, Inc. 2009 annual audit on December 31, 2009. The audit planning procedures have already been completed, and an audit planning memo has been included in the workpaper file. In addition, risk assessment procedures were also completed, and are summarized in the risk assessment and control assessment memos included in the workpaper file. Some pro-forma and partially completed workpapers have already been prepared. Further, some of the substantive audit procedures have already been completed, and the staff auditor has indicated which procedures have been conducted by initialing those steps in the audit programs. Note that the audit programs were developed during the planning stage, and therefore may include procedures that are not applicable, based upon the information discovered during the current year audit. In that event, indicate that the procedures are not applicable by initialing the audit program step and entering N/A in the workpaper reference column.

Begin the audit procedures by familiarizing yourself with the information available in each of the simulation files provided. Some information that may be available in an actual audit may not be available in the simulation. Should you encounter such a circumstance, you may assume that no errors, discrepancies, issues, etc. exist outside of the information provided in the simulation. The reports and information available in the simulation are included in the following files:

A) AUDIT WORKPAPERS

1) 2008WORKPAPERS

2) 2009 PLANNING DOCUMENTS

a) Audit Programs

b) Engagement Letter

3) 2009 AUDIT DOCUMENTS

a) Bank Statements

b) Bank Confirmations

c) Accounts Receivable Confirmations

d) Accounts Payable Confirmations

e) Broker's Confirmation

f) Insurance Confirmation

g) Attorneys' Letters

h) Management Representation Letter

4) 2009 PRO-FORMA WORKPAPERS

5) 2008/2009 FINANCIAL STATEMENTS

B) CLIENT RECORDS

1) ACCOUNTING RECORDS

a) General Ledger/General Journal

b) Other Records:

* Cash Receipts Journal

* Cash Disbursements Journal-

Operating Account

* Aged Accounts Receivable Sched.

* Aged Accounts Payable Sched.

* Sales Journal

* Sales Invoice Register

* Purchases Journal

* Check Register- Operating Account

* Inventory Valuation Report

* Inventory Unit Activity Report

* Inventory Item Costing Report

* Cost of Goods Sold Journal

2) CLIENT DOCUMENTS

a) Sales Invoices

b) Cash Receipts Vouchers

c) Deposit Tickets

d) Duplicate Check Copies- Operating Account

e) Brokerage Advices

f) Standard Price List

g) Vendor Invoices- Operating Account

h) Vendor Invoices- Inventory

3) PAYROLL RECORDS

a) Payroll Accounting Records

* Payroll Journal

* Payroll Cash Disbursements Journal

* Payroll Check Registers

b) Payroll Tax Returns

c) Duplicate Check Copies- Payroll Account

d) State Withholding Taxes

To begin the simulation, you must copy the following files on to your computer or a separate CD:

A-2) Audit Planning Documents

A-4) 2009 Pro-Forma Workpapers

A-5) 2008/2009 Financial Statements

All of the work that you perform and changes that you make in completing the simulation must be performed on the copy of those files that you have made. No changes should be made to the information provided in the simulation, as you made need that original information to complete the simulation. Students may also find it helpful to print a hard copy of each assignment's pro-forma workpapers for reference purposes before starting the assignment. The audit workpapers for each assignment can be completed using the computer, or the pro-forma workpapers can be printed first and completed manually.

At the conclusion of the audit, all workpapers, along with the comparative financial statements for 2008/2009 and audit opinion, should be printed and assembled in a final workpaper file for submission.

CASH

Storage Sheds, Inc. maintains two bank accounts, both at Centurion Bank, and an imprest petty cash fund. The operating checking account is used for all cash receipts and disbursements other than those related to payroll transactions and expenditures that flow through the petty cash fund. The payroll checking account is an imprest fund used only for employee paychecks and payroll tax payments. All receipts in the payroll account are from electronic fund transfers via the operating checking account. The company receives end-of-month bank statements for each account, and Susan Andrews prepares a reconciliation of each account when the statements are received. Each reconciliation is reviewed and approved by Matthew Silver and maintained in the company files.

The petty cash fund has an imprest balance of $2,000. Millie Miles is the fund custodian and maintains control over the fund balance and disbursements. The fund is used solely for small expenditures requiring currency. To receive currency from the fund, employees must present a completed petty cash voucher with supporting documentation, and approval of Matthew Silver, to Millie Miles. Upon verification of the information, Ms. Miles disburses currency, in an amount equal to the voucher submitted, to the employee, and marks the voucher as paid. The paid voucher is then placed in the petty cash box along with the remaining currency. When currency in the fund is running low, Ms. Miles replenishes the fund by requesting a check be drawn on the operating account in an amount equal to the vouchers in the fund. She then cashes the check, places the currency in the fund and removes the paid vouchers. The paid vouchers are then used to support recording of the related expenses through an entry in the general journal and maintained in the company's files.

CASH RECEIPTS

All of the company's sales are on a credit basis; there are no cash sales. Collections of accounts receivable are recorded in the cash receipts journal. When checks are received from customers they are restrictively endorsed, and a cash receipt voucher is created. Cash receipt vouchers are recorded individually in the cash receipts journal and posted simultaneously to the customer's subsidiary account receivable ledger. Millie Miles records each cash receipt voucher on a deposit ticket, and deposits the checks at the bank each Wednesday. Duplicate copies of each deposit ticket are maintained in the company's files.

The only receipts received by the company that are not recorded through the cash receipts journal are those representing unusual or non-operating transactions. Such receipts are recorded through an entry in the general journal. Duplicate copies of the related deposit tickets are also maintained in the company's files.

CASH DISBURSEMENTS

All disbursements of company funds are done through the issuance of a check drawn on the operating account, with the exception of the small currency disbursements issued through the petty cash fund, and payroll transactions. Checks for operating expenditures are drawn upon receipt of vendor invoices that have been approved for payment by Matthew Silver. Checks for inventory purchases are drawn upon receipt of vendor invoices that have been approved for payment by Susan Andrews. All checks are pre-numbered and issued sequentially. Inventory purchases, operating expenses, etc. accounts are posted simultaneously with the issuance of each check. All checks are signed by Matthew Silver prior to mailing to the vendors.

Operating account checks are recorded in the company's check register and posted to the cash disbursements journal immediately upon issuance. Duplicate copies of all checks issued are maintained in the company's files.

Funds required at the end of each payroll period are transferred electronically to the company's payroll checking account and recorded through an entry in the general journal.

REQUIRED

1.Print the following documents for inclusion in the workpapers:

1/15/10 bank cutoff statement-operating a/c

1/15/10 bank cutoff statement-payroll a/c

Bank confirmation

2. Complete each of the steps in the cash audit program and initial and reference each step to the workpapers.

6)	Obtain a copy of the client-prepared bank reconciliation for the payroll
	account and perform the following:
	a)	Trace the balance per bank statement to the 12/31/09
		and 1/15/10 bank statements.
	b)	Trace the balance per bank to the bank confirmation
		received directly from the bank.
	c)	Trace the balance per books to the trial balance.
	d)	Foot the bank reconciliation.
	e)	Ensure the any deposits in transit were not recorded as deposits
		per the 12/31/09 bank statement.
	f)	Trace deposits in transit to:
		1)	Bank transfer recording in the general journal prior
			to 12/31/09.
		2)	Deposits per the 1/15/10 cutoff bank statement.
			AUDIT PROGRAM
			CASH
							AUDITOR	W/P REF.
	g)	Ensure that all checks listed as outstanding per the bank
		reconciliation were not included in the 12/31/09 bank statement.
	h)	Trace outstanding checks to:
		1)	Duplicate check copies dated prior to 12/31/09
		2)	Check register recording prior to 12/31/09
		3)	Canceled checks per the 1/15/10 cutoff bank
			statement.

AUDIT PROGRAM CASH AUDITOR W/P REF. 1 ) Prepare a cash lead schedule to include all cash accounts and enter the 12/31/09 balances from the trial balance. C.J. D 2) Prepare bank confirmation requests, with client signiatures, for all bank accounts in existence during 2009. Mail the confirms to the banks and maintain copies in the workpaper files. C.J. 3) Obtain the 12/31/09 bank statements for all accounts from the client. C.J. 4) Request the client to obtain cutoff bank statements from the banks as of 1/15/10, and have the statements mailed directly to our office from the banks. C.J. 5) Obtain a copy of the client-prepared bank reconciliation for the operating account and perform the following: a ) Trace the balance per bank statement to the 12/31/09 and 1/15/10 bank statements. b ) Trace the balance per bank to the bank confirmation received directly from the bank. C) Trace the balance per books to the trial balance. d) Foot the bank reconciliation. e) Ensure the any deposits in transit were not recorded as deposits per the 12/31/09 bank statement. f) Trace deposits in transit amounts to: 1 Client cash receipts journal prior to 12/31/09 2) Copies of deposit tickets dated prior to 12/31/09 3) Client's cash receipt vouchers dated prior to 12/31/09 4) Deposits per the 1/15/10 bank cutoff statementk) AUDIT PROGRAM CASH Ensure that all checks listed as outstanding per the bank reconciliation were not included in the 12/31/09 bank statement. Trace outstanding checks to: 1) Duplicate check copies dated prior to 12/31/09 2) Check register recording prior to 12/31/09 3) Client's cash disbursement joumal prior to 12/31/09 4) Canceled checks per the 1/15/10 cutoff bank statement. Investigate all checks over $1,000 on the list of outstanding checks that did not clear on the cutoff bank statement. Note the last check # issued at 12/31/09 and ensure all prior check #'s were recorded in 2009, and all subsequent check #'s were recorded in 2010. Investigate all other reconciling items and determine the propriety and reasonableness thereof. Obtain a copy of the client-prepared bank reconciliation for the payroll account and perform the following: a) Trace the balance per bank statement to the 12/31/09 and 1/15/10 bank statements. Trace the balance per bank to the bank confirmation received directly from the bank. Trace the balance per books to the trial balance. Foot the bank reconciliation. Ensure the any deposits in transit were not recorded as deposits per the 12/31/09 bank statement. Trace deposits in transit to: 1) Bank transfer recording in the general journal prior to 12/31/09. 2) Deposits per the 1/15/10 cutoff bank statement. AUDITOR WIP REF. e) Ensure the any deposits in transit were not recorded as deposits per the 12/31/09 bank statement f ) Trace deposits in transit to: 1) Bank transfer recording in the general journal prior to 12/31/09. 2) Deposits per the 1/15/10 cutoff bank statement. AUDIT PROGRAM CASH AUDITOR W/P REF. g) Ensure that all checks listed as outstanding per the bank reconciliation were not included in the 12/31/09 bank statement. 00 h) Trace outstanding checks to: 1 Duplicate check copies dated prior to 12/31/09 02 03 2 ) Check register recording prior to 12/31/09 04 05 3 ) Canceled checks per the 1/15/10 cutoff bank 06 statement. 07 08 7) Prepare a bank transfer schedule for a period 10 days before and after 09 12/31/09 for all amounts over $1,000 and perform the following 10 a ) Review the cash receipts and cash disbursements journals, 12 bank statements, cutoff statements and general journal entries 13 for 10 days before and after 12/31/09 for all amounts over $1,000 14 and determine whether all items are included on the bank transfer 15 schedule. 16 b ) Determine if all receipts and disbursements per books are 500 recorded in the same month. For receipts/disbursements with bank statement dates that differ from dates per books, trace such transfers to proper inclusion in deposits in transit and/or outstanding checks per the bank reconciliations. C) Investigate any disbursements with bank statement dates that precede the dates per books. 25 26 d) Determine whether the number of days lag between bank statement dates and dates per books appears reasonable 28 and investigate any unusual delays. 29 30 8) Count the petty cash fund and perform the following: 31 32 a) Count currency in the presence of a client representative.8) 8) 9) 10) d) Determine whether the number of days lag between bank statement dates and dates per books appears reasonable and investigate any unusual delays. Count the petty cash fund and perform the following: a) b) Cc) d) e) f) g) Count currency in the presence of a client representative. Summarize cash counted by denomination. List all vouchers and other items in the petty cash fund at the time of the count. AUDIT PROGRAM CASH Examine all vouchers for propriety. Trace the imprest balance of the fund to the trial balance. Reconcile the balance of the fund to the imprest balance. At the conclusion of the count, retum all currency and other items to the petty cash custodian and obtain a signed receipt. Review all bank confirms for the following: a) b) 2) Account restrictions Guarantees, letters of credit or contingent liabilities. Loans, lines of credit, commitments or contingencies indicated by the bank. Be alert for items that may be indicative of fraud, such as unexplained reconciling items, improper reconciliations, etc. AUDITOR WIP REF