Audit program design part ii Essay Example for Free

Audit program design part ii Essay With the exception of cash sales, every transaction and amount is ultimately included in one of two balance sheet accounts, accounts receivable or allowance for uncollectible accounts. There are eight business functions for the sales and collection cycle. The first four processes are for recording sales, while every other class of transactions includes only one business function. The four sales transaction functions are necessary for getting the goods into the hands of customers, correctly billing them, and reflecting the information in the accounting records. The remaining four functions involve the collection and recording of cash, sales returns and allowances, write-off of uncollectible accounts, and providing for bad debt expense. Classes of TransactionsBusiness Functions SalesProcessing customer orders Granting credit Shipping goods Billing customers and recording sales Cash ReceiptsProcessing and recording cash receipts Sales returns and allowancesProcessing and recording sales returns and allowances Write-off of uncollectible accountsWriting off uncollectible accounts receivable Bad debt expenseProviding for bad debts (Arens, 2012, p.443) The direction of testing for sales is as follows: Customer orders; Shipping Documents; Duplicate Sales invoices; Sales Journals; and General Ledger. (Arens, 2012, p. 455) Tests of Controls For each control, there should be at least one test of control, but there can be more than one. We will gather evidence for internal controls by: Documentation; Observation; Inquiries of the client; and Re-performance. The tests create audit evidence that support the common assertions for the business cycle: ïÆ' ¼Existence and Occurrence: to ensure that sales are recorded for shipments to genuine customers; ïÆ' ¼Completeness; All existing sales transaction are recorded; ïÆ' ¼Accuracy: to ensure that amounts of sales for quantities shipped is recorded and billed accurately, is summarized appropriately and is traceable to accounts receivables master file; ïÆ' ¼Presentation and disclosure/ Classification: Sales transaction are appropriately classified; and ïÆ' ¼Cut-Off: The sales are recorded in the accounting period in which these were incurred. We propose the following tests of controls for Sales and Collections: ïÆ' ¼Examination of purchase orders from customers for evidence of customer approval; ïÆ' ¼Inspection of sales invoice for supporting documentation; ïÆ' ¼Tracing Sale invoice figures to bill of lading and customer order; ïÆ' ¼Inspection of batch control file for initials of data control clerk authenticating sign off; ïÆ' ¼Follow up on the sequential pattern of Shipping documents; ïÆ' ¼Examination of file for batch totals and initials of data control clerk; ïÆ' ¼Inspect the internal verification documentation package; and ïÆ' ¼Re-perform reconciliation of customer debtors master file totals to general ledger balance. Substantive Tests of Transactions For each transaction, there should be at least one substantive test, but there can be more than one. We will gather evidence for internal controls by: Documentation; Inquiries of the client; Re-performance; and Recalculation. The tests create audit evidence that support the common assertions for the business cycle: Existence and Occurrence, Completeness, Accuracy, Presentation and disclosure/ Classification, and Cutoff. We propose the following substantive tests of transactions for Sales and Collections: ïÆ' ¼Ensure that the sales invoices are serially numbered; ïÆ' ¼Review master file and sales journal for unusual transactions and abnormally high or low amounts; ïÆ' ¼Trace the sample of selected sales journal entries to its supporting documents like , bill of lading and sales order inter alia , also check duplicate sales invoice issued (if any); ïÆ' ¼Trace information as per shipping documents to the sales journal; ïÆ' ¼Trace sales journal ledger entries to sale invoices on sample basis; ïÆ' ¼Verify amounts on the sale invoice by re-computing price and extension on the same; ïÆ' ¼Trace amounts of sales from Sale invoices to customer orders, sale order and shipping documents like bill of lading etc.; and ïÆ' ¼Trace selected invoices from journal to the Trade debtors’ master file and test amount, date, and invoice number for valuation and cut off. Analytical Procedures Because analytical procedures are substantive tests, they reduce the extent to which the auditor needs to perform detailed tests of balances, if the analytical procedure results are favorable. Our audit team performs analytical procedures for the entire sales and collection cycle, not just accounts receivable. When we perform analytical procedures for sales, we obtain evidence about both sales and accounts receivable. We propose the following analytical procedures for Sales and Collections: Analytical Procedure Possible Misstatement Compare gross margin percentage with previous Overstatement or understatement of sales years (by product line). and accounts receivable. Compare sales by month (by product line) Overstatement or understatement of sales over time. and accounts receivable. Compare sales returns and allowances as a Overstatement or understatement of sales percentage of gross sales with previous years returns and allowances and accounts (by product line). receivable. Compare individual customer balances over a Misstatements in accounts receivable and stated amount with previous years. related income statement accounts. Compare bad debt expense as a percentage of Uncollectible accounts receivable that have gross sales with previous years. not been provided for. Compare number of days that accounts Overstatement or understatement of receivable are outstanding with previous years allowance for uncollectible accounts and and related turnover of accounts receivable. bad debt expense; also may indicate fictitious accounts receivable. Compare aging categories as a percentage of Overstatement or understatement of accounts receivable with previous years. allowance for uncollectible accounts and bad debt expense. Compare allowance for uncollectible accounts Overstatement or understatement of as a percentage of accounts receivable with allowance for uncollectible accounts and previous years. bad debt expense. Compare write-off of uncollectible accounts as Overstatement or understatement of a percentage of total accounts receivable with allowance for uncollectible accounts and previous years. bad debt expense. (Arens, 2012, p. 524) Payroll and Personnel Cycle The personnel and payroll cycle of Apollo Shoes Inc. must be audited with the inclusion of tests of controls, substantive tests of transactions, and analytical procedures. Tests of account balance details are not required considering the balance sheet accounts regarding payroll are not of a material nature (Arens, Elder, Beasley, 2012). Transactions within the payroll cycle have the potential for materiality and are therefore far more important when designing the audit program. Test of Controls Internal control over the payroll and personnel cycle is significant to the accuracy of each payroll transaction. In order to properly test controls regarding each of the audit objectives listed above the design for test of controls includes several review and examination factors, as well as discussion with employees. Substantive Test of Transactions Tests of transactions may happen during the testing or internal control or may happen after the internal control has been tested depending on the most efficient way to conduct the audit program. Tests of transactions for the personnel and payroll cycle are of high importance because of the volume of transactions throughout the accounting period. Transaction testing allows for identification of irregularities and potential misstatements in payroll. Apollo Shoes Inc. uses an internal form known as a â€Å"take home sheet† that indicate gross pay, each deduction, net pay, and year to date totals for each employee (Louwers Reynolds, 2007). Examination and comparison of this form, the corresponding payroll register, and the corresponding canceled checks will make up a large portion of the tests of transactions. 1.Compare canceled checks with payroll register 2.Compare canceled checks with take home sheets 3.Compare payroll change documents to payroll employee files 4.Recalculate register entries and take home sheets 5.Recalculate hours worked from time records (Arens, et al., 2012) 6.Compare payroll register and take home sheets with vouchers paid 7.Examine employee records for all unclaimed checks 8.Compare â€Å"paid† register and vouchers with master payroll file 9.Examine time cards and time clock Analytical Procedures Analytical procedures as a part of the audit program allow for the relatively quick comparison of specific account details that may lead to identifying possible misstatements that require additional detailed testing (Arens, et al., 2012). Analytical procedures involve the use of current and historical information to make comparisons. If the comparison result differs from the expected then additional testing will be necessary. Compare salary expenses to those from last year in order to determine if the expected increase in salary expense is reasonable (Louwers Reynolds, 2007). Compare total payroll expense to previous years accounting for pay and volume increases to establish whether or not there are misstatements in payroll expenses (Arens, et al., 2012). Compare sales to last year and review these in order to determine if the changes in payroll and sales are relative from one year to the next. Increased sales with a decrease in payroll for example may indicate a misstatement. Compare payroll tax expense as a percentage of salaries and wages to previous years to determine potential misstatements in payroll tax expense (Arens, et al., 2012). Review executive salaries and determine if they correspond to the salaries authorized in the board minutes (Louwers Reynolds, 2007). Acquisition and Payment Cycle With the acquisition and payment cycle, there are three main transactions in this cycle, which entail: ïÆ' ¼Attainment of merchandises and amenities, ïÆ' ¼Cash distribution, and purchase returns, and ïÆ' ¼Allowances and buying reductions. The first assessment goal is to check for existence by confirming that acquisition demand, purchase order, receiving report, payment transactions and merchant statements are attached to the coupon. It needs to be confirmed that the level of credit authorization is accurate, entrance of acquisitions are from approved merchants only, and that each transactions are appropriate. Then the, papers are studied for existence, merchants are certified, and payable records are reviewed for uncommon accounts. The fixed assets that are attained are observed too. The next audit goal is to check control for extensiveness by testing that the transactions are renumbered and in sequence order. Transactions are outlined to coupons and journals. Additionally is to assess controls for correctness by validating that the calculations are accurate and are associated to summary reports. The journals and reports are paralleled for correctness. The goal of the assessment is to check controls for arrangement by validating account grouping and inspecting the chart of accounts and processes by linking the grouping through the chart of accounts as they mention to the merchant’s statement. The audit goal is to assess the controls for timing by validating periods and observing and witnessing unrecorded merchant statements and transactions. These are confirmed on the inside. The dates of acquiring these reports and statement are then paralleled with dates of acquirement and payment transactions. The assessment platform is intended to let the business to comprehend how the auditors will be testing internal controls. This sequence of exams and methodical processes are intended to demonstrate the worth and rationality of the sales and collection cycle, payroll and personnel cycle, and acquisition and payment cycle. The exams center on existence, wholeness, and correctness. Once the exams are done, we will have a better indication on how to continue with the remainder of the assessment. It will help to regulate how long the assessment might be and what the price could be. References Arens, A. A., Elder, R.J., Beasley, M.S. (2012). Auditing and assurance services: An integrated approach (14th Ed.). New York, New York: Pearson. Louwers, T. J., Reynolds, J. K. (2007). Apollo Shoes Casebook. New York, New York: McGraw-Hill.

Reinhold Niebuhr :: essays research papers

Niebuhr, Reinhold (1892-1971), American Protestant theologian, whose social doctrines profoundly influenced American theological and political thought. Born in Wright City, Missouri, June 21, 1892, he was educated at Elmhurst College, Elmhurst, Illinois; Eden Theological Seminary, Webster Groves, Missouri; and Yale Divinity School. In 1915 he was ordained in the ministry of the Evangelical Synod of North America and made pastor of the Bethel Evangelical Church of Detroit. He held that post until 1928, at which time he joined the faculty of the Union Theological Seminary, New York City, where he taught for 30 years. At the time of his retirement (1960) he held a chair of ethics and theology; he also served as dean (1950-55) and vice president (1955-60). After retiring he continued at Union as a lecturer. An outstanding, although not a systematic, theologian, Niebuhr was notable primarily for his examination of the interrelationships between religion, individuals, and modern society. Outside the field of theology, he took a keen interest in trade union and political affairs. He was an active member of the Socialist Party in the 1930s, waged a vigorous fight against isolationism and pacifism before and during World War II, and in 1944 helped to found the Liberal Party in New York State. He received the U.S. Presidential Medal of Freedom in 1964 and was made a member of the American Academy of Arts and Letters. He died on June 1, 1971. Niebuhr indicated his overriding interest in what has been called theological anthropology, a concern with the nature of man as a contact point for religion and society, in such major works as Moral Man and Immoral Society (1932), Interpretation of

Preparation for Chinese New Year Essay

Preparations for the New Year begin a couple of weeks before the big day. This is a fun time full of anticipation and joy as we get ready for the thrill and excitement of the celebrations. According to the traditions, this is the time to clean the house, prepare food for the feast and make banners and decorations special for the New Year. A clean house to welcome the New Year Before the New Year comes, it is one of the Chinese New Year customs to clean the house from top to bottom to get rid off all the bad luck gathered in the previous year. And after the New Year comes, you cannot sweep during the first days otherwise all the new luck will sweep away! So one of your Chinese New Year activities will be to†¦ clean your room! Wouldn’t want all that accumulated bad luck for another year would you!! Cleaning house also means settling all your unfinished business to start fresh for the new year: Pay off all your debts, resolve all quarrels with friends, catch up with homework!!! Make some Banners and Decorations Red banners with New Year messages of good luck decorate the main entrance of your house/room. Red is a very lucky color and symbolizes vitality of life and happiness. You can make your own Chinese New Year decorations with bright red paper and markers or a brush if you prefer. Here are some instructions to make your own New Year Banners including the â€Å"Lucky Characters† stroke by stroke. Preparing the Chinese New Year Banquet On New Year’s Day, the families come together to celebrate and everything must be ready for this important fest. Food must be prepared ahead of time, as one of the popular Chinese New Year superstitions dictates that all knives must be put away. Using a knife during the first days of the New Year â€Å"cuts off† all the good luck for the coming year. The New Year’s feast takes many days to prepare. These are some of the traditional chinese new year foods served on New Year’s day and throughout the festivities: * meat dumplings for good luck * tangerines for good fortune * apples for peace * sweet rice cakes for more wealth every year * fish for plenty * veggies with long noodles for long life * chicken for wealth * mustard greens for a green year for farmers * soup means everything better than last year * oranges for money and wealth * shrimp for abundance Paying respects to the Ancestors The New Year Celebrations can only begin after paying respect to the ancestors. On New Year’s Eve, people will go to the temples and pray for good fortune for the new year. They bring offerings of food and incense to please the spirits of the deceased so that they might bring good luck. So now that all the preparations are done with, the long-awaited day arrives and the New Year’s festivities can begin! Chinese New Year Preparation Preparing for the Chinese New Year begins on personal and social front and can start months before the New Year. These preparations are made in the hope to usher the New Year in the best context possible. Most people try to settle their debts with friends before the New Year so that they can start the New Year debt free. However, this settling of debt often refers to debt between friends and do not include home or car loans with financial institutions. These are considered as investments. Many people will also check predictions of their luck in the New Year. The Chinese calendar has a 60 year cycle and each year is presided by a star. Everyone has a star that corresponds with the year of birth. This birth star may conflict with next year’s presiding star, çŠ ¯Ã¥ ¤ ªÃ¥ ²  creating difficulties in work, business or personal life. To avoid or minimize the impact, rituals can be conducted at temples before the New Year. During the dates for these rituals, temples are often crow ded with devotees. Nearer to the New Year families start their spring cleaning to welcome the New Year. This is the period when new furniture or minor renovations will be undertaken. Chinese New Year decorations such as couplets, banners are used to create a festive atmosphere. A major activity before the New Year is the exchange of gifts. Most of the gift items have symbolic meanings or status symbols to demonstrate good will or to express good wishes. New Year gifts can be presented to family, friends and between companies. Popular items include New Year cakes, Niangao, Ã¥ ¹ ´Ã§ ³â€¢ in auspicious shapes, Mandarin oranges, Bakkwa (BBQ meat), sweets, candies, chocolates and hampers. New Year cards è ´ ºÃ¥ ¹ ´Ã¥  ¡ are also sent to family members, friends and business contacts. A few weeks before the Chinese New Year, markets and fairs specializing in New Year goods can be found in most cities. These markets offer foodstuff, candies, New Year decorations, flowers, clothes, New Year CDs and almost everything required for the New Year. These items are bought as gifts, for home consumption or used to entertain visiting family members or guests. These New Year markets often end in the early hours of New Year’s day. Many people visit these markets after their reunion dinner and stay till after midnight to buy the items at huge discounts.

My Memories - Original Memories - 907 Words

My earliest memories I could think of is when I was probably five years old. That was a year before I started Kindergarten. I was always bored because we didn t have television. We had the radio where we listen to for news, sports, drama series, and even typhoons update. At age five I would wake up before six in the morning because my mother would get so angry if I ever stayed on bed passed six o’clock. I would fix our bed, brush my teeth, and sweep the entire yard. That was my routine every morning with or without school. I grew up in a farm in the Philippines where we grew our own rice, fruits and vegetables. We have lots of dogs, pigs, ducks, and chicken. We didn’t have all the luxuries like fridge, washing machine, cars, and specially tv. I was always jealous with my cousins who lives in the city. Instead of watching tv, I started to read tagalog books before I started Kindergarten. I was the only student that knew how to read and writes nicely. Being the oldest child in the family was tough.I was the only one who always get spanked from my parents specially my mom. I have three sisters and one brother whom I love so dearly. I was always be the daddy’s girl because he wasn’t always too strict to me. My mother on the other hand would always yell and spank me for the most time. I would say that I would get in trouble pretty much every day in my life. Even if I wash dishes, clean the house there was something she didn’t like about it. I didn t get to play much because myShow MoreRelatedMy Memories - Original Memories1255 Words   |  6 PagesOne of my earliest memories, as a young child growing up in the 1960s and 1970s, was the visits to my Nan’s home in south Ealing, west London. My family had moved from London to live in the seaside town of Weston-super-Mare in the mid 1960s. 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