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Your audit firm is responsible for the audit of Elite Vehicles Ltd, a manufacturer of motor vehicles for the commercial market. Elite Vehicles Ltd employs 5 000 people at their head office in Pofadder. You are responsible for the audit of one of the divisions of Elite, namely the cafeteria. The cafeteria sells food and beverage items to all personnel of Elite Vehicles Ltd. Staff buy on a cash basis, or they use their personnel cards to purchase on account, referred to as credit sales. Credit sales are reconciled monthly and deducted from staff salaries in the next month. The cafeteria uses three cash registers. Sales are regarded as a very high-risk area. Management feels that sales are understated because not all sales are rung up by the cashiers. Management is also of the opinion that huge losses are incurred within the cafeteria due to pilferage. During the interim audit you became aware of the following factors: 1. The daily cash-up sheets for each cash register are not numbered. 2. Stock receipts are not always checked by the storemen. 3. Beverages are all bar-coded. Meals are not. Sales are rung up on a point of sales system, using both scanners and touch screen tills. You are performing the year-end procedures during May for the 30 April financial year- end. REQUIRED: Discuss the audit procedures to verify cafeteria credit and cash sales as at year-end. Your audit firm is responsible for the audit of Elite Vehicles Ltd, a manufacturer of motor vehicles for the commercial market. Elite Vehicles Ltd employs 5 000 people at their head office in Pofadder. You are responsible for the audit of one of the divisions of Elite, namely the cafeteria. The cafeteria sells food and beverage items to all personnel of Elite Vehicles Ltd. Staff buy on a cash basis, or they use their personnel cards to purchase on account, referred to as credit sales. Credit sales are reconciled monthly and deducted from staff salaries in the next month. The cafeteria uses three cash registers. Sales are regarded as a very high-risk area. Management feels that sales are understated because not all sales are rung up by the cashiers. Management is also of the opinion that huge losses are incurred within the cafeteria due to pilferage. During the interim audit you became aware of the following factors: 1. The daily cash-up sheets for each cash register are not numbered. 2. Stock receipts are not always checked by the storemen. 3. Beverages are all bar-coded. Meals are not. Sales are rung up on a point of sales system, using both scanners and touch screen tills. You are performing the year-end procedures during May for the 30 April financial year- end. REQUIRED: Discuss the audit procedures to verify cafeteria credit and cash sales as at year-end.
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Below audit procedures needs to be performed for auditing the sales ac... View the full answer
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-1259569197
8th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip Olds
Posted Date:
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