Prepare an audit program that will list the objectives and audit procedures you will conduct for the
Question:
Prepare an audit program that will list the objectives and audit procedures you will conduct for the audit. (In tabular form)
Key Facts:
1. The store is operating for 12 hours from 9 in the morning until 9 in the evening.
2. The store has 10 employees and structured as follows:
a. Accounting - 3 employees (2 staffs and 1 manager)
b. Cashiers- 2 employees
c. Store staffs/packers - 2 employees
d. Security Guards - 2 employees for two shifts
e. Store Manager - 1 employee The store manager is also the owner.
The store operators are divided into two teams which will be the opener and the closer.
3. The purchasing function of the store is handled by one of the accounting employees. He is responsible for identifying items that need to be ordered as well as maintaining the inventory tally sheet. He conducts a weekly inventory count and reconciles it with the record. Any variances are just reported as mere inventory overage/shortage in the report that is submitted to the manager on a weekly basis.
4. Once the accounting staff identifies the inventories that need to be purchased, he will submit a list to the accounting manager and store manager for approval. Once approved, he will contact their suppliers to ask for quotations. Once received, he will prepare a purchase order and let the accounting and store manager approve it before sending it to the suppliers for purchase. The store has a 10 - 15 day credit on their suppliers
5. The other accounting employee is responsible for reconciling the receipts with actual cash remittances. He is also responsible for depositing the cash collections on the bank.
6. Daily Cash collections are deposited the next banking day. In case there are holidays, cash collections are turned over to the store manager's safety cash box.
7. Prices of their stocks always have a markup of 5%. Prices are updated monthly based on the latest cost of the products by the manager.
8. The accounting system they have is only a shared excel file that lists all their sales and purchases for the period. One file is maintained every month. Bothe the accounting and manager can access this file.
9. The accounting manager manually prepares the monthly report requested by the store manager. These reports are monthly cash collections/sales, Purchases/Inventory monitoring, Income statement and monthly cash balance.
10. The cashiers are preparing a daily cash sale report based on the POS system. In their POS system, the store manager and accounting team can update the sales prices of the inventories. In case the cashier made a mistake, only the store manager can override the transaction. But if the store manager is not around, the accounting manager is responsible for authorizing the override.
11. In their sales operation, the customer just needs to get what he needs and pay it to the cashier. The guard needs to ensure that there is a receipt for every customer who buys in the store.
12. The store also has CCTV cameras for safety purposes.
Auditing and Assurance services an integrated approach
ISBN: 978-0133125689
15th edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley